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May 20th, 2010, 01:46 PM #1Do you have to send 1099s to the IRS?
I was reading resently on eHow that you do not have to send copies of the 1099s to the IRS. It says specificly
"Businesses usually send a copy of this 1099 form to the IRS, but they are not required to do so by law; they are only required to keep a copy of the form in their files."
Is this true? You can view the whole thing here
May 20th, 2010, 02:16 PM #2
DISCLAIMER - I'm not a CPA nor do I play one on TV - for general informational use only
The article you linked contains much mis-information.
For this type of information, you should look to IRS publications.
The Internal Revenue Code requires that all 1099s be transmitted to the IRS with form 1096. This form and the original 1099s can be mailed to the IRS so long as the total number of 1099s does not exceed 250. If it does, then they must be filed electronically.
The article is also wrong where it states that the independent contractor who receives the 1099 is to include it with his income tax form sent to the IRS. Unlike the rule for W-2 forms, recipients of 1099s DO NOT attach or include those forms with their income tax returns.
MODS - This question does not concern the "Affiliate Tax" issue and should be moved to the Affiliate Legal Lounge.
Last edited by Phil Kaufman aka AffiliateHound; May 20th, 2010 at 02:29 PM.
January 6th, 2011, 07:40 PM #3
- Join Date
- January 5th, 2011
As a business owner you diffidently need to claim 1099"s. If you don't they will pentalize you big time.
Moderator Note: Manual Signature/Link Removed
Last edited by MichaelColey; January 8th, 2011 at 01:40 PM.
January 8th, 2011, 02:13 PM #41099-MISC data is put onto Schedule C and Form 1040
Those who issue the 1099-MISC form send that data to the I.R.S. and to the person or company who earned the income. The person or company filing an Income Tax return with the I.R.S. does not attach the 1099-MISC form to the actual return. However, the income from the 1099-MISC form is included on the Income Tax return.
If you check out the tax preparation software put out by TurboTax, TaxACT, etc., they have you input all of the information from the 1099-MISC form, for your U.S. income tax return. That helps prepare the Schedule C and the Form 1040.
If someone receives a 1099-MISC form and does not report that income to the I.R.S., that person *will* have problems with the I.R.S.
Net Income from Self Employment (Schedule C) above USD$400.00 is subject to Self Employment Tax (Social Security and Medicare) if one is a U.S. Citizen or a Permanent Resident of the United States.
Disclaimer: I am not a tax professional. This is what I believe to be true, from the preparation of my own U.S. return for 2010.
January 8th, 2011, 06:55 PM #5
- Join Date
- January 18th, 2005
Yes, companies are legally required to file 1099s with the IRS.
In fact, you can actually ask the IRS what 1099s were filed for your taxpayer ID number.
Some years ago, a company sent me "late and incorrect" 1099 (understating what they'd paid me). After I called, they sent me a different 1099 -- still for the wrong amount. On April 15, I filed for an extension, submitting payment for the tax amount I knew I'd owe (the amount was never in doubt, it was just where this merchant's payments would be listed on my tax return). Eventually, in May, the merchant sent me a third 1099 with the correct amount on it, but I strongly suspected that they never filed the third 1099 (since they'd probably need to pay a fine for filing it so late).
In early August, I just called the IRS, explained the situation, and asked if they could tell me what their records showed. I don't recall the exact procedure; I might have faxed them a form, but I don't think there was any fee. They faxed me a sheet listing all the 1099s for my SSN for that tax year.
It turned out (as I suspected) that the merchant had never filed that third 1099, so I put down the "filed" 1099 amount and then listed the balance of that merchant's payments as non-1099 revenue.
The next two years, that merchant didn't send me (or file) any 1099s, even though they'd paid me more than $600 each year. Each year, I had to include their payments in my general non-1099 revenue.
For those who might wonder, "hey, why declare income that wasn't reported?" I will point out that apart from being the "honest and right thing to do," there is a very clear paper trail for direct-deposit payments, and a merchant with such sloppy practices is at very high risk of audit, which could easily cascade into audits of all that merchant's payees.
Last edited by markwelch; January 8th, 2011 at 07:02 PM.
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