IRS 1099 Forms Filing Due Dates: Did you file your 1099 Forms for 2020 tax year? If your answer is “No”, then hurry up! The due dates for filing IRS Form 1099 are nearby. The IRS imposes substantial penalties for 1099 Forms, including penalties for late filing, failure to file, etc.
When it comes to filing 1099 Forms, you need to make sure that you don’t miss out on filing your 1099s, failure, and timely. The IRS continues to enforce 1099 compliance. If you’re required to file 1099 Forms, then you must be aware of the following penalties. These penalties apply for both paper filers as well as electronic filers.
When do you file a 1099 Form with the IRS?
IRS considers 1099 Forms as “information return forms”. Because they provide information about the prior year payments to independent contractor, self-employed individuals, freelancers etc. You’re required to file a 1099 Form with the IRS when you pay:
Independent contractor income
If you paid an independent contractor as rent, royalties, other income of $600 or more, then you need to report the payments to the IRS. You’re required to file 1099 MISC Form to report the miscellaneous payments like rent, royalties etc.
When you paid compensation of $600 or more to a non-employee for services performed in a year. You need to file Form 1099 NEC online to report the non-employee compensation made in a calendar year. The services performed by a non-employee are on course of trade or business.
Dividends and distributions
If you paid $10 or more dividends and distributions on stock or property in a year, then you need to file 1099 DIV tax form.
$10 or more interest paid in a calendar year to the investors who made investments must be reported using 1099 INT Form.
IRS requires every individual or business owners to report the payments made to independent contractor during a tax year using 1099 Forms.
Deadline to file IRS 1099 MISC
1099 MISC Form used to report miscellaneous income paid to an individual or independent contractor for performing work in a calendar year. This includes rent, royalties, substitute lieu of dividends, crop insurance proceeds, etc.
IRS 1099 MISC Form is due to the recipient by February 1st, 2021. If you’re paper filing 1099 MISC Form to the IRS, issue Copy A of the Form by March 1st, 2021 by mailing. Furnish the Copy A of Form 1099 MISC to the IRS by March 31st, 2021 by e-filing. The due date to furnish the recipient copy when filing 1099 MISC Box 8, and box 10 payments are by February 15th, 2021.
When is 1099 NEC tax Form due to the recipients?
Most of the payments are made to non-employees and are reported using new 1099 NEC tax form. Business individuals use 1099 NEC to tell the IRS whenever they’ve paid an independent contractor $600 or more in compensation. The IRS uses this information to independently verify the payees income, and also payees federal income tax levels.
If you’re an independent contractor or self-employed individual, you must receive 1099 NEC tax form by the end of January or starting of February. For the payments made in 2020 tax year, the filers must furnish 1099 NEC copy B to the recipients by February 1st, 2021. Issue the copy A of the Form to the IRS by February 1st, 2021. The due date is the same for paper forms, and e-filing forms.
What happens when you miss IRS 1099 deadline?
Missing the deadline is not the end, but you’ll have to pay the following IRS penalties for each late 1099 Form:
- $50 if you correctly file within 30 days of the due date.
- If you correctly file more than 30 days late, but by August 1st, $110 per 1099 Form.
- $280 per 1099 Form, if you file on or after August 1st or you don’t file the required 1099.
- Failure to file a correct information return due to intentionally disregard, the penalty is at least $550 per 1099 Form.
- If any failure to provide a correct payee statement is due to intentionally disregard, the penalty is at least $560 per payee statement.
Federal 1099 Forms circumstances to pay penalties
The IRS really wants every individual to make sure of all the information on 1099s are accurate and that you file on time. In addition to penalties for errors on forms, the IRS fines for late forms, missing forms, or missing TIN. Here are the penalties to be aware of:
Late forms or incorrect forms
The IRS imposes penalties for failure to file information return on time. The penalty varies from $50 – $280 per information return.
The penalty has been increased to the greater 10% of the amount required to be reported on the return if a filer neglects to send forms altogether. This penalty has no maximum.
No filing over 250
Businesses that required to file over 250 1099s of the same type, must file electronically. Otherwise, the filer faces fine of $250 per form.
If required 1099 Forms are missing TINs or have incorrect TINs, then the IRS can impose fine up to $270 per form.
1099 Form penalty exceptions
Following are the exceptions to 1099 Form penalty:
- The penalty can be waived if you could not file 1099 Forms due to an event out of your control and not because of the willful neglect.
- Incase you made an error or omission on the payee statement. That doesn’t hinder the payee from using 1099 information to file his/her tax returns. Then the error is considered as inconsequential, and the penalty can be waived.
- When you made an error or omission, but the IRS can still take that information and process 1099.
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