GET YOUR 1099s FILED
By David G Hanger
January 14, 2015
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
Received January 14, 2015 - Published January 15, 2015
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