BHT&D Certified Public Accountants Blog

Should I File A Form 1099? There Are Penalties If You Don't.

Posted by Aric Salgat on Mon, Oct 19, 2015 @ 08:00 AM

Does this need a Form 1099?With the passage of the Trade Preference Extension Act of 2015 on July 31, 2015, the penalties for non-filers of required information forms have been substantially increased.

Some of the more common information returns include 1099 Forms, Form W-2, and the new Forms 1094/1095 required by the Affordable Care Act.

The penalties for returns required to be filed after December 31, 2015 will be as follows:

  1. $50 per return for returns not filed or filed with incorrect information but corrected/filed within 30 days from due date.
  2. $100 per return for returns first filed or corrected within 30 days and August 1st.
  3. $250 per return for returns not corrected or filed by August 1st.
  4. $500 per return or 10% of the amount to be reported if intentional disregard is proven.

Selected examples of when a Form 1099 is required to be issued, includes when your business pays $600 or more during the calendar year for the following:

  1. Fees paid to an attorney, whether incorporated or not.
  2. Medical services, including amounts paid to a veterinarian, whether or not incorporated, if the entity is a for-profit entity.
  3. Payments for “services” to non-incorporated entities, including non-employee compensation.
  4. Rent paid for real estate or equipment rent.

The above list represents the more common items requiring the issuance of a Form 1099 and is not inclusive of all situations requiring the issuance of an information return.  For most information returns, the due date to the recipient is January 31st and the due date to be filed with the Internal Revenue Service is February 28th.

By: Aric Salgat, CPA

If you have any questions or need assistance on preparing 1099s or other information returns, please feel free to contact one of our CPAs at (616) 642-9467 or request a complimentary accounting consultation.

Photograph by Kartha