Who's ready for Tax Time? 1099's are due soon, here's what you need to know!

Its tax season again, if you didn’t already know it. Most of you know that you need to file your personal income tax returns. You may not be aware of your obligation to produce and deliver annual information returns to recipients. The annual informational returns I’m talking about are commonly referred to as 1099s, and they are due on February, 1st 2016 for the tax year ended December 31, 2015.

1099 forms report information to the taxpayer that receives them. The same information on the 1099 is also reported to the IRS, on a different form called a 1096. This is so that the IRS may match information about items of income and/or deduction between two taxpayers.

There are many different types of Form 1099. Form 1099-DIV reports dividends, Form 1099-Int reports interest, and Form 1099-R reports distributions received from a pension plan or an IRA to the form’s recipient in the tax year. Most of you will not have to worry about actually furnishing these information returns. The more tricky form is the Form 1099-Misc.
Many of you will be obligated to furnish annual information returns on Form 1099-Misc. Here’s the general rule to let you know if you need to furnish Form 1099-Misc:

If you paid an individual, partnership, and in some cases an LLC, or any other person that is not a corporation $600 or more for:

  • Rent or other business payments
  • Personal services
    Prizes and awards
  • Crop insurance proceeds
  • Fishing boat proceeds
  • Or medical and health care payment

You need to furnish the recipient with a form 1099-Misc by February 1st 2016. The form 1099-Misc must also be filed, along with Form 1096, with the IRS by March 1st 2016 if you file by paper or by March 31st 2016 if you file electronically.

chadgillmanIf you need help preparing these forms, or fear you have not filed or prepared them correctly please give us a call, we would love to help you out.

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