SitNews - Stories in the News - Ketchikan, Alaska

Viewpoints: Letters / Opinions


By David G Hanger


January 14, 2015
Wednesday PM

Forms 1099 need to be sent to the recipients no later than January 31. There are a variety of Forms 1099, and this writing will be limited to discussing Form 1099MISC. This is the 1099 that is due if you paid someone what is termed ‘non-employee compensation.’ In other words if you paid someone without giving them a W2 as an employee of your company or firm, you need to file Form 1099 if the amount paid exceeds $600.

In point of fact since the Tax Reform Act of 1986 all transactions involving $600 or more technically require the issuance of a Form 1099. If you buy a dishwasher, washer & dryer, giant wall TV, or computer and pay more than $600 for the item, the law says you need to send Walmart, Dell, and/or Sears a 1099. This aspect of that law has never been enforced because it would require a paperwork flurry that would literally require the establishment of new business entities to handle the load, but I have no idea what the future holds.

For any labor payment, though, get those 1099s out by the end of the January. For several years now the IRS has a two-line questionnaire on the requisite forms that asks, “Were you required to file Forms 1099?” “Did you file Forms 1099?” YES or NO. The IRS does not put questions on a tax form for no reason. Expect extreme penalties and the possible disallowance of payments not reported on Form 1099.

It is easy. Get it done. Avoid the negative consequences.

David G Hanger, EA, MBA
Ketchikan, Alaska


Received January 14, 2015 - Published January 15, 2015


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