Make note that the filing deadline for 1099's has been changed to January 31, 2017.
The IRS has become muchmore aggressive in assessing penalties and the penalties for failing to file 1099's can be very significant. Therefore we strongly encourage you to make sure you meet this filing deadline.
Generally, you are required to issue a 1099 for payments made in the course of your trade or business. This also includes nonprofit organizations. Form 1099-MISC should be filed for each person or entity to whom you have paid during the year at least $600 in services (including parts and materials), rents, prizes and awards, medical and health care payments, and other income payments. Payments to a corporation may be excluded. Additionally, payments for merchandise may be excluded. Other Form(s) 1099 are required for payments if interest, dividends, royalties, etc. The filing threshold for these 1099's is $10 in most cases.
As mentioned above, the penalties for failure to file a Form 1099 have increased significantly. Income tax returns now contain the following questions:
- Did you make any payments that would require you to file Form(s) 1099?
- If yes, did you or will you file all required Forms 1099?
Failure to answer these questions truthfully may subject you to additional penalties of perjury. Therefore it will be important that you answer these questions truthfully. In the event of an IRS audit, one of the first items verified will be compliance with the filing of Forms 1099.