Form 1099 is one of the most common types of IRS documents. Now that another tax season has arrived, the 1099 filing process is underway and it’s a process that needs to be taken seriously. Is there a thorough and convenient way for business owners to complete all of the tasks involved in the 1099 process? In this episode of “Unique Perspectives – The DGC Podcast,” our guest is Dan Gaudet, CPA, a Principal at DGC and the leader of our firm’s Accounting & Business Advisory Services Group. Dan discusses the 1099 filing process, and how you can avoid possible penalties.
This is the fourth episode in a series of podcasts geared towards our Accounting & Business Advisory Services clients. The first episode discussed the importance of tax planning. Episode two covered year-end payroll adjustments. The third episode discussed the value of accounting services.
The following is a partial transcript from Dan’s interview with host Tom Annino.
Tom Annino: 1099s are common and they cover many types of payments. What are some of the more common types of payments?
Dan Gaudet: Payments for non-employee compensation. For example, if you have a consultant to your firm that you’re paying $600 or more during a calendar year, that type of transaction is generally going to require a 1099. There are some exceptions. If that particular company that you’re paying is incorporated, then you don’t need to send a 1099. But also, payments for rent, payments to attorneys, payments for royalties, interest, dividends, debt cancellation, medical payments, and other types of payments may require 1099 reporting.
TA: When you approached us to record this episode, you said this topic is especially important right now because of two reasons, timing and penalties. Why are those two areas so important now when it comes to 1099s?
DG: Most 1099s, and there are many different kinds - 1099 miscellaneous, 1099s for interest and dividends, they have different due dates. Generally speaking, the most common which is the non-employee compensation reporting form is due at the end of January. That’s to both the IRS and a copy to the recipient. They need to get there by the end of January. That doesn’t give you a lot of time after year-end to get that done. Leaving 1099s out of your filing or intentionally not preparing 1099s can result in some steep penalties.
So what steps can you take to ensure that you’re compliant? Listen to the entire episode by clicking here or use the Soundcloud player above.
DGC’s Accounting & Business Advisory Services Group takes the stress out of the 1099 process by managing it from start to finish. For more information, contact a member of your DGC client service team or Dan Gaudet, CPA at 781-937-5142 / firstname.lastname@example.org.