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1099 Business Tip for 2022
The IRS has again increased penalties and stiffened filing requirements for filing informational forms. They are not messing around!
Penalties apply if you file after the IRS deadline, file on paper instead of electronically, include incorrect information or report an incorrect TIN. Penalties range from $50 to $270 per return, with a maximum of $1,094,000 [yes, that is a MILLION dollars! YIKES!] for small businesses.
As we have said ad nauseum, make sure you are having EVERYONE who provides services for you (anyone not on your payroll) fill out a W-9. You can find the W-9 form available on the IRS website OR ask us!
We recommend you have that person fill out the W-9 before you issue them a check, even if you think it is a one-time service and a less than $600 job. The $600 amount is based on total amount paid for the year. For example, if you pay someone $150 and later pay them another $450, the total for the year is $600, resulting in a required Form 1099. And the IRS is cracking down on this (see penalties above).
So, please remember to send us a copy of the W-9 when you have them fill it out. No W-9, no payment to that person. Full stop.
The rules (which have not changed) for filing Form 1099 include the following –
Payments totaling at least $600 in:
- Rents,
- Services performed by someone who is not your employee,
- Prizes and awards,
- Other income payments,
- Payments to attorneys or labs (ANY amount) or,
- Fishing boat proceeds (and this applies to all of us, we are sure!).
Form 1099s must be filed on or before January 31 of the following year (in 2022 for 2021 payments).
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