Filing your 1099s can seem daunting, but here’s what you need to double-check before submitting them.
Whether you’re self-employed or own a small or large business, everyone should be focused on filing their tax returns for the 2021-2022 tax year, which begins in January 2020.
The new 1099 guidelines will take effect on January 1, 2022, which is when the IRS will start accepting forms. If you have not filed your 1099s yet, here’s the list of what to do.
Overdraw is a company designed to help 1099-MISC (miscellaneous income) business owners submit information about their employees and pay taxes.
Follow these guides to get a complete understanding of 1099 form updates. You’ll also learn simple ways to fill out 1099 forms and follow the eFile regulations as necessary.
Key takeaways from the checklist:
- Assessment of your vendor lists
- Verify TINs (Taxpayer Identification Numbers)
- 1099 reports validation
- Assessment of paper file threshold
- Submit copies of forms
- Be sure to file your forms before the due date
- How to get help?
Assessment of your vendor lists
Some businesses may be carrying forward the profiles of certain contractors to the next tax year because they weren’t yet added to their master sheet or weren’t included in their tax returns.
But keep in mind that if you have compensated independent contractors in the current tax year, then all such payments must be reported on 1099 forms for the current tax year.
Preparations for your tax return might also include what to do if you need to make any last-time adjustments
It is important to make sure you have checked the credentials of all the suppliers you work with. Your business won’t be caught off guard with year-end deadlines and therefore can avoid any costly consequences. VEndor’s verification technology helps you to verify critical tax information, such as TIN. The next task will help you learn more about TIN Matching in detail.
Verify TINs (Taxpayer Identification Numbers)
When you confirm the vendor’s tax number & name against the IRS’s records, you can confirm that they match.
Don’t risk vendor back-and-forth. Verify your TIN now!
Make sure to check that you reported the correct TIN for each transaction because if you’re found in violation and don’t report an additional TIN within 10 days of discovery, the IRS could penalize your business with a $250 penalty for every TIN discrepancy.
To avoid any miscommunications with your vendors, make sure that you verify the TINs as received from them. This will eliminate the chance of errors and help you reduce risk at tax time.
1099 reports validation
When verifying your vendor’s TIN and name information, you’ll want to pause to examine the transactional data they’ve provided. Ensure that you keep track of all payments that left your company. This will allow you to ensure they are recorded accurately for tax purposes.
The rule is that if you have paid any outside parties over $600, you need to report all payments on your 1099. You need to know the type of activity the company has done for you, so you can fill out the form correctly.
At times transactions can be quite complicated.
Assessment of paper file threshold
The news on the threshold is still there for debate, but there might be a change coming on 1099. If the proposed regulations take place, businesses will be able to carry paper files only up to 100 different types of forms. With each new tax year, the population of people who need to file electronically will grow. Paper filing will soon become a thing of the past.
Submit copies of forms
Nowadays, many businesses are focused on submitting the forms to the IRS soon. However, there is just one other party to whom you need to send a copy of your 1099 forms – your recipient/payee.
It’s especially true that when it comes to filing 1099-MISC and 1099-NEC forms, there’s a relationship with another party other than the IRS.
The table below has some important deadlines by the end of the year. Make sure to make any necessary changes before it is too late.
Be sure to file your forms before the due date
Form 1099-MISC Due Date: 2021-2022 Tax Year
- Recipient Copy (with data in box 8/10) – Feb 15, 2022
- Recipient Copy (without data in box 8/10) – Jan 31, 2022
- IRS – eFile – March 31, 2022
- IRS – Paper file – Feb 28, 2022
Form 1099-NEC Due Date: 2021-2022 Tax Year
- Recipient copy – Jan 31,2022
- IRS- eFile – Jan 31,2022
- IRS – Paper file- Jan 31,2022
How to get help?
If you are unsure about FORM 1099 filing, speak to one of our tax advisor. Please click here to schedule your free consultation call.
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