This is an excerpt from a presentation I give to business owners and HR professionals about 1099s.
There are two deadlines to keep track of, including one that is a major change starting in 2017 (for filing 2016 forms). In the past, the deadlines were:
- All forms in the 1099 series must be issued to recipients by January 31.
- All forms in the 1099 series must be issued to the IRS by February 28/29 if filing on paper, or by March 31 if e-filing.
Effective with the 2017 filing season, for 2016 forms, 1099s (and W-2s) must be filed with the IRS by January 31 as well.*
*-Thank you to an alert reader who pointed out that the new rules do NOT apply to all 1099 filings, only to 1099-MISC forms reporting box 7 compensation. Here’s the way it should read:
Effective with the 2017 filing season, for 2016 forms, these are the new rules:
- Any Form 1099-MISC reporting box 7 (independent contractor) payments must be filed with both the recipient and the IRS by January 31. (The new deadline also applies to W-2s, which must be given to recipients and the IRS by January 31 now as well.)
Form 1096, “Annual Summary and Transmittal of U.S. Information Returns” must also be submitted to the IRS by the filing deadline. Form 1096 summarizes all information forms submitted by the filer. Form 1096
If filing on paper, make sure to use the proper version of the forms. Forms printed off the IRS website generally cannot be filed with the IRS. You can provide a recipient with their copy of the 1099 based on a form you printed from the IRS website, but those forms cannot be sent to the IRS.
Forms that are acceptable to file with the IRS can be found at office-supply stores or can be ordered from the IRS.
The IRS accepts hand-written 1099s but the handwriting must be legible. If typing the 1099s, the IRS prefers Courier 12-point font.
When filling out the 1099, the IRS says to leave blank any box that doesn’t apply, rather than putting a 0 in the box.
All 1099s can be sent to the IRS on paper or electronically – but some filers must submit the forms electronically. The mandatory e-file requirement applies to any filer who file 250 or more “information returns.” The term “information return” refers to all of the various reporting forms that may need to be issued – W-2s, 1099s, 1098s, etc.
The 250 threshold applies separately to each type of information return.
Example: ABC Company employs 251 employees and thus must issue 251 W-2s. Additionally, ABC must issue 200 Forms 1099-MISC. The e-filing requirement applies separately to each type of information return. So ABC would be required to e-file their W-2s but NOT the 1099-MISC forms.
Note that any filer can choose to file electronically, even if they’re not subject to the filing requirement. So in the example above, ABC could choose to e-file the 1099-MISC even though they’re not required to.
How to E-file
There are many options available for e-filing 1099s with the IRS. Some bookkeeping or accounting software may handle e-filing for you. A variety of websites that are officially registered with the IRS can also e-file 1099s. Most of these websites allow for importing of data from an Excel spreadsheet or from accounting software.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”