If you have a small business and hired independent contractors in 2014 then you may have a responsibility to file information returns and issue 1099’s to those contractors by 1/31/2015. Failure to do so will result in penalties imposed by the IRS.
The IRS requires that you file information returns (1099’s) for cash and check payments issued by your trade or business to individuals not treated as your employees as well as non-incorporated entities. You will have this requirement if you issued payments of:
There was an important change to 1099 reporting that must be considered in compiling 1099 amounts. The new 1099-K form will be issued for all merchant and third-party network payments. Basically, this new form will report all payments made to businesses via credit card processor. The merchant and third-party companies are responsible for preparing 1099-Ks; therefore, any items a business pays through a credit card should not be included in the amounts compiled for 1099-Misc forms such as Pay-Pal.
Generally, payments to corporations are exempt with the exception of legal services.
The following payments made to corporations generally must be reported on Form 1099-MISC:
Please contact us if you would like Pace Accounting to file these forms for you. To assure accurate preparation, please forward the following for each person or business: