As another year has quickly passed, it’s time for our business clients (and landlords) to prepare for issuing 1099’s. The 1099 reporting window from year end to due date is short, with reporting due no later than January 31, 2024. Here is what we think you need to be aware of.
If you have a bookkeeper, please pass this information on.
Overview of 1099 Reporting
Generally, Forms 1099 must be provided to vendors to whom you have paid over $600, for a service, during the year. This includes:
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- subcontractors
- casual laborers
- janitors
- lawn maintenance
- rent to your landlord
- attorney fees (any amount, not just over $600)
- your CPA
- marketing companies
- consultants, etc
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Landlords are also required to submit 1099s if it’s considered a Trade or Business. This is in your best interest because it can also help you qualify for the 20% QBI deduction.
Exempt Payments
You do NOT need to send a 1099 to:
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- Corporate vendors, unless they provide medical or legal services
- Payments you paid on a credit card, debit card, Paypal, Cash App for Business, Venmo. (Zelle payments are considered bank transfers and do require 1099)
- Your credit card company and Paypal will send their own 1099-K to the recipient
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TIP: if you don’t want to hassle with 1099s, pay the vendor with a credit card!
Due Date
Forms 1099 must be provided to the vendor and to the IRS no later than January 31st.
NON-COMPLIANCE PENALTIES
Penalties for not filing can be up to $530 per Form 1099. There is NO penalty for sending a 1099 when you’re not required. We advise, if in doubt, go ahead and send one!
Can Aligned CPA Process my 1099’s
We would be happy to assist you in filing these forms. If you are a monthly accounting client of ours, this is included in your 2023 accounting package.
What We Need to Process your 1099’s
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- Completed Forms W-9 for all vendors you have paid over $600 during the year (you can download a blank W-9 Here)
- An email address for each vendor
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Aligned CPA Fees and Due Date
We require all documentation to be delivered to our office on or before January 10, 2024 to ensure the filing deadline is met.
1099 processing fees are subject to the number of forms prepared. For additional information and proposal for services, feel encouraged to email us at info@alignedcpa.com or by calling 386.752.4005.
Joy Lutz, CPA, CTP
I help our client’s keep more money in their pockets by implementing proactive tax strategies.
I promise you, working with a CPA and Certified Tax Planner can be much more exciting than crunching numbers and reviewing last year’s taxes.