The Mystery of 1099s Solved

For the first time ever the IRS asked on all the Business & Rental tax returns in 2011 “Did you make any payments that would require you to file Form(s) 1099”? And followed up with “If 'Yes', did you or will you file all required forms 1099” so you better make sure you are doing it correctly.  As the Federal Government looks to increase their revenue what better place to look than those subcontractors that have been falling through the cracks?

As most business owners know 1099-Misc are to be sent out to each person to whom you have paid at least $600 in rent, services, etc.  They do not have to be sent to Corporations but do have to be prepared for LLCs and Partnerships. 

Here is what you need to know about filing a 1099-Misc.  The due date to send out 1099s is January 31 to the recipient (the January 31 date can be extended for one month by filing Extension form 8809) and to the IRS by February 28 if paper and April 1 if filed electronically.  The IRS copy for the Northeast region of the country should be mailed to Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301.  If you have more than (250) 1099s they must be filed electronically. 

You must show the individual’s name on the first name line: on the second name line, you may enter the “doing business as (DBA) name.  You may not enter only the DBA name.  For the TIN, enter either the individual’s social security number or the Federal Employer Identification Number of the business (Sole Proprietorship).  The IRS prefers that you enter the SSN. For example if you were sending a 1099 to David’s Dog Walking Service you would put David Stratton on the first line and dba David’s Dog Walking Service on line two.  You would also use David’s social security number not his Federal ID number.

1099 mystery solved!