Robert Loe CPA

New Deadline for Tax Year 2016 (Form 1099 and Form W-2)

In an effort to combat identity theft fraud, there are new deadlines that go in effect for tax year 2016. The IRS now has a January 31 deadline for W2’s, both paper and electronic filed. That date also applies to certain types of 1099s. If you’re filing Form 1099-Misc and are reporting amounts in Box 7Nonemployee Compensation, which you are required to do for service providers who received $600 or more from you during 2016, then you will need to meet the new filing deadline of January 31.

Form 1099 filing is mandatory for those engaged in a trade or business. If you have rental properties and are considered a real estate professional for tax purposes, that activity may be considered a trade or business. If you are not sure whether you are a real estate professional, give us a call.

As in prior years, the IRS is enforcing and assessing penalties for late and incorrect filing, or non-filing. The IRS has the authority to disallow your tax deduction if required 1099’s are not filed. These penalties can range from $50 to $530 per return depending on how late it is filed.

Inexpensive software is available online and in some retail stores should you choose to file the Forms 1099 yourself. Typically, they are offered in packages that consist of software and blank Form 1099’s that allow you to quickly and effortlessly create the forms to be filed.

If you would like us to prepare your 1099’s prepared by us, we must receive your information by January 15th. Information received after that will be done in the order received and may not meet the deadline. Form 1099 needs to be prepared for anyone paid rent, outside services, labor, interest and commissions ($600.00 or more). All legal fees need to be reported regardless of amount. Corporations are not issued 1099’s (except attorneys and medical). Please have the person being issued the 1099 fill in the information and keep for your records. Just a reminder, many sole proprietors and partnerships use social security numbers rather than an employer identification number. We must have the full name of the recipient and the DBA, if they have one. You should request all service providers to provide you with a Form W-9 listing their full name, DBA if applicable, and mailing address.

Credit card payments to service providers are not required to be reported on a 1099.

If you have any questions please do not hesitate to contact our office. We look forward to seeing you soon.

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