Types of 1099 Forms

There are several types of 1099 forms commonly used for reporting different types of income:

• 1099-NEC: Reports non-employee compensation, including payments to subcontractors, web developers, accountants, and other professionals, when these payments exceed $600 in a calendar year.
• 1099-MISC: Used to report miscellaneous income such as rent, royalties, and other types of payments.
• 1099-INT: Reports interest income earned.
• 1099-DIV: Used to report dividends and distributions.
• 1099-B: Reports broker and barter exchange transactions.

Procedures for Issuing 1099 Forms

Before issuing any payments to a vendor, ensure that you obtain the most recent W-9 form from them. You can access the blank W-9 form using this link.

Review the completed W-9 form carefully to verify that it includes all necessary information, including:

• Recipient’s name
• Business and tax structure
• Address
• Employer Identification Number (EIN) or Social Security Number (SSN)

Note: If your vendor is a corporation (C corporation or S corporation), you are not required to issue a 1099 form to them.

Key Deadlines for Filing Form 1099

It’s crucial to meet the IRS deadlines to avoid penalties.

• January 31 Deadline to provide Copy B of Form 1099-NEC to recipients and file with the IRS.
• February 28 Deadline to file Form 1099-MISC and other types of 1099s with the IRS if filing by paper.
• March 31 Deadline to file electronically with the IRS.

Penalties for Non-Compliance

Failing to file a required Form 1099 or filing late can lead to significant penalties:

• Failure to file: Penalties start at $50 per form if filed within 30 days after the deadline, increasing to $290 per form for filings more than 30 days late.
• Intentional disregard: If the IRS determines you intentionally disregarded the requirement to file, the penalty is $580 per form.

Here is more info. On 1099s link.