1099s

The IRS has been increasing pressure for businesses and rental property owners to comply with the reporting requirements. Penalties have increases and the business and rental schedules ask if you are required to file 1099s; and if you have, or will do so.

A 1099-Misc is required to report amounts paid for services of non employees paid $600 or more in a calendar year and amounts paid for rent of business leases unless paid to a management company. You will need the name, address and social security number, or tax ID number of each person or entity you paid. Payments for services to Corporations, generally, need not be reported; but payments to LLCs are required.  For details and exceptions see:

http://www.irs.gov/pub/irs-pdf/i1099gi.pdf

Notice that amounts as low as $10 of interest paid are required to be reported on 1099-INTs. A separate 1096 cover form and separate mailing is required for each type of 1099 filed.

1099s are due to the recipients by January 31st and to the IRS by January 31st. A 30 day extension is available with form 8809 at:

http://www.irs.gov/pub/irs-pdf/f8809.pdf

E-filing the 1099 forms automatically extends the due date to March 31st. Deziel’s Tax Service does not e-file 1099 forms, but several online services do for a reasonably small cost.

The 1099s and cover page form 1096 MUST BE MACHINE READABLE. Thus it is best to type out the forms, prepare them on a computer program, or have them e-filed through a service. The distinct red ink of the 1099 and 1096 forms align them for machine reading. Thus you cannot download IRS pdfs and file them; although they are OK for the recipient’s copy. You can order official (red ink) 1099s, (and other IRS forms like W-2s) at:

http://www.irs.gov/Businesses/Online-Ordering-for-Information-Returns-and-Employer-Returns

We order extras and have limited forms available at the tax office.

Completed red ink 1099s and cover sheet 1096 for Minnesota and surrounding states are mailed to:

Department of the Treasury
Internal Revenue Service
Kansas City, MO  64999

It is NOT required that a copy of the 1099 be sent to Minnesota unless there is Minnesota withholding, or there should have been. In such case filings of 10 or fewer 1099s can be mailed to:

Minnesota Revenue
Mail Station 1173
St. Paul, MN 55146-1173

Filings of more than 10 1099s with withholding requirements must be e-filed to Minnesota. We cannot do this for you. It would be best to e-file with the same service you chose to e-file you 1099s to the IRS. Make sure this service is available for Minnesota before choosing an e-file provider. I Googled “1099 e-file service” and found several who only charge about $4 per 1099. this is far cheaper than we could do them for. Some low cost providers are:

http://www.tax1099.com/
http://www.efileforbusiness.com/

10% Off

for all personal tax returns completed before March 9.