For any business whether it’s a sole proprietorship, partnership, or corporation now is the time to be thinking about your 1099-MISC filing requirement for 2012. You need to determine if you have made any payments that require you to issue 1099-MISC and whether you have all of the information needed to complete them. The requirements to issue these forms have existed for many years, but enforcement and penalties have grown stronger more recently.
A few of the more common requirements include:
The $600 threshold is cumulative for the entire tax year so regardless of how many payments are made to each payee, one 1099-MISC must be issued to each payee in which the total for the year exceeds $600.
It’s important to remember that anyone with a management function in connection with the payments or anyone with a significant economic interest in the payments made on behalf of another taxpayer can be held responsible for issuing the Form 1099-MISC.
Copies of the Form 1099-MISC are to be provided to the payees by January 31, 2013 and failure to do so can result in penalties up to $250 per form. Businesses can request a 30 day extension to file with the IRS but that does not allow additional time to provide the 1099 to your payee.
Although Massachusetts participates in the federal-state combined filing program, you are still required to submit a copy of the completed 1099-MISC to the Massachusetts Department of Revenue. These forms must be filed with the Massachusetts Department of Revenue by February 28, 2013.
Please contact a member of your DGC service team for assistance in determining your Form 1099-MISC filing requirements and for help with preparation of the form.
Information contained in this article/post was current as of January 4, 2013.