What is Form 1099?
Form 1099 is a tax form used to report various types of payments made other than salaries.
Who has to report?
All US businesses who make payments to Compliance. applicable recipients
Why is it important?
For payers: Mandatory for reporting to IRS before deadline
For recipients: Mandatory for reporting in their tax filing
Types of Form 1099
There are several different 1099 forms, each designated by a specific number (e.g., 1099-MISC, 1099-NEC, 1099-K, 1099 -INT, 1099-DIV, etc).
The form you use depends on the type of expenses and income you received during the tax year.
Form 1099-NEC
Businesses are required to report payments made to independent contractors, freelancers, sole proprietors, and self-employed individuals to whom the business paid $600 or more during the year.
Due date for filing: By January 31st of each year.
Form 1099-MISC:
File Form 1099-MISC for each person to whom you have paid during the year $600 or above as rents, prizes and awards, medical and health care payments and Payments to an attorney etc.
Due date for filing: By February 28th file on paper & March 31st file electronically each year.
Form 1099-INT:
Form 1099-INT is issued by financial institutions to individuals who earned interest income on their accounts.
This can include interest from savings accounts, certificates of deposit (CDs), H or other interest-bearing investments.
Due date for filing: By February 28th file on paper & March 31st file electronically each year.
Form 1099-DIV:
Form 1099-DIV is sent by financial institutions to individuals who receive dividends or distributions from their investments.
Sources of Dividends are Stocks, Mutual Funds and REITs.
Due date for filing: By February 28th file on paper & March 31st file electronically each year.
Form 1099-K:
Form 1099-K reports payments from payment apps or online marketplaces and from credit, debit or stored-value e cards.
Due date for filing: By February 28th file on paper & March 31st file electronically each year.
Interest and penalty
Information return penalties:
IRS Department charges penalties for each information return you fail to correctly file on time and each payee statement you fail to provide.
Charges for each information return or payee statement
Year Due - 2024
Up to 30 Days late - $60
31 days late through August 1 - $120
After August1 or not filed - $310
Intentional Disregard - $630
Interest on a penalty:
IRS Department charges interest on penalties. The date they begin to charge interest varies by the penalty type and amount. Interest increases the amount you owe until you pay your balance in full.