If you paid more than $600 to any individual, LLC or partnership for rent or services provided to your business during 2011, then you must send that entity a 1099. You must also file all copies of Forms 1099 with the IRS, along with cover sheet, Form 1096 by February 29, 2012.
How Can I Easily Determine Which Vendor Will Need a 1099?
Your QuickBooks file is the perfect tool so you can determine if you need to file a 1099 to any particular vendor. By looking at your Profit & Loss report for 2011, you want to pay attention to all service and rent categories such as:
· Advertising & Promotion
· Misc.
· Outside Service
· Legal Fees
· Accounting Fees
· Professional Fees
· Repair Service
· Rent/CAM Charges – this one goes under “rent” on 1099. not non-employee compensation
· Storage – same as above
When you find those categories, click on the amount to review the detail. This way you can identify which vendors received more than $600. If any vendor’s name ends in “Inc, Co., Corp. or Corporation,” then there is no need to issue a 1099. If the company is a C-Corp or an S-Corp, they are excluded from receipt of 1099s. For example, eeCPA is an S-Corp, so no need to send us a 1099!
What information do you need from the service provider?
You will need the full name of the individual or business, the address and the individual or business' Taxpayer (Employer) Identification Number, along with the amount that you paid to that provider during 2011. All of this information can be obtained by sending your vendors Form W-9. Click here to obtain this form.
Do you need help in preparing your Forms 1099?
eeCPA is here to help...
1. We will gather the information from you.
2. We will prepare all of the forms and mail them to the recipients by the deadline.
3. We will file the government forms electronically on your behalf.
4. We will send you copies of all of the forms and a summary report once the filings have been completed.
If you provide us with the information that we need, we will charge you just $25 per 1099.
If we need to gather the information from your accounting files and determine the filing requirements, then we will charge you based upon our standard hourly rates.
Why should you file Forms 1099 timely?
The #1 reason to file your Forms 1099 timely is to preserve the deductibility of your expenses.
Secondly, you want to file the 1099's timely to avoid the penalties for late and/or incomplete filings. The penalties range from $30-$100 per 1099 Form if not filed, filed late or incorrectly filed.
Tips to make the 1099 process less painless for 2012...
Have all of your service providers complete a Form W-9 prior to making payment to them. That way they have incentive to complete and return the form to you, and you have all of the information that you need when it comes time to prepare your 1099s for 2012.
