Pre-season update time! Our Newsletter will be going out next week. The IRS just announced that they will open January 29th this year. We can prepare your taxes now if you already have all your documents, but we can’t actually send them to the IRS until they open. In addition, the IRS has announced that they will hold the entire refund of any returns that include Education Credits, Child Tax Credits or Earned Income Tax Credits (pretty much everyone filing early!) until at least February 15, but more likely February 27th! For clients that need their refunds sooner, we can do refund loans of up to $2500.
If you need help getting organized or want to schedule an appointment, please call our office. We are open M-F 9-4 until the 29th when our normal tax season hours begin.
Reminder for our Business Clients: Tax Facts provides payroll services to our clients, and we are currently doing annual reports as well as issuing W2’s and 1099’s. Let us know if you need assistance. The IRS is serious about their due date of January 31 to get W2’s and 1099’s to your employees/contractors as well as getting your annual reports filed/paid. If you do these late, expect severe penalties ($$$)!
When the IRS requires you to send a form 1099-MISC
If during the calendar year you hired contractors in the course of running your trade or business, you may have to issue them a 1099-Misc. The IRS makes this requirement so that you remind folks you pay to include such payments on their tax returns. You also need to furnish the IRS with a copy of the 1099-Misc.
Who does not get a 1099?
- The recipient is a corporation
- You included the payment in a W-2 form (to an employee)
- The payment is for a tangible product (office supplies, computers, etc), or
- The total payments during the calendar year were less than $600.
Who needs to get 1099?
- The payments were Professional fees made to an attorney, doctor or other professional, as long as they are made in the course of your trade or business. Do not issue a 1099 for payments that are for personal expenses.
- Any person you paid $600 or more who perform services for you in your business or trade.
- Payments to corporations are included only if they are for medical, health care, legal or fishing activities (yes, fishing!).
- Payment of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business will also require a 1099-Misc if the payment was made to an individual or partnership, not a corporation.
What is a payment?
Payments include commissions, fees, interest, rents, royalties, annuities and any other type of compensation or income to a single recipient.
The IRS deadline for mailing 1099 forms for payments made in 2017 is Jan. 31, 2018.
OOPS! If you inadvertently fail to issue a proper Form 1099 by Jan 31st, the IRS can assess a $300 penalty. The penalty for each intentional failure can be $500 or more.
It’s important to note that individuals are not required to send 1099-MISC for personal payments. Individuals are not required to send a 1099-MISC to an independent contractor to whom you have made a personal payment unrelated to your trade or business. So you don’t have to issue a 1099-MISC to your landscaper or house painter….not yet anyway.