As we get closer to the year end, it is important to know that your business may be required to comply with Form 1099 rules.
Does your company currently hire independent contractors, vendors, and others that you pay non-employee compensation (box 7) to? If yes, did those individuals, LLCs and LLPs that are not a C or S corporation receive payment for more than $600? If yes, then you are required to file and issue a 1099 to both the service provider as well as the IRS. Failure to issue a 1099 can result in penalties.
If you are filing a 1099 for non-employee compensation they must be filed by Friday, January 31, 2020.
*** Please note that corporate service providers are not included in this requirement, unless it is to an attorney and then you are required to prepare a 1099 regardless of the entity type. ***
Does your company pay more than $600 in rent to a non-corporate landlord? If yes, then you are also required to file a 1099.
If you are filing a 1099 for rent the 1099-MISC must be filed by Friday, February 28, 2020.
If you have any questions about your reporting requirements, please contact your tax professional at Isdaner & Company (610) 668-4200 and we will be more than happy to help you with your request.