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Showing posts from January, 2016

Happy Groundhog Day!!

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1099 Reporting Takes on New Prominence as Sharp Penalty Increases Take Effect

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Important information regarding 1099 reporting from Parker Tax Pro Bulletin With hefty increases in information reporting penalties (as high as $250 per late 1099) taking effect on January 1, 2016, timely issuance of 1099s has become a critical imperative for many businesses. The new urgency for timely issuance is compounded by the continued presence of questions on Forms 1065, 1120, 1120S, and 1040, Schedules C, E, and F, asking whether the taxpayer made any payments in 2015 that would require the taxpayer to file Form(s) 1099. Increased Penalties for Failing to File Correct 1099s Last June, Congress enacted hefty increases in the penalties imposed under Code Secs. 6721 and 6722 for failures relating to information returns and payee statements. The changes, which were included in the Trade Preferences Extension Act of 2015 (Pub. L. 114-27), took effect on January 1. Information reporting penalties apply if a payer fails to file timely, fails to include all informa

Don't get lost in the tax code! Come visit the professionals at Gardner & Billing CPAs.

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Who gets a 1099?

Form 1099-MISC is used to report certain types of payments made in the course of a trade or business. If you're in business or self-employed, you may need to submit this report to both the Internal Revenue Service and the person or business that you paid.  The form is filed between January 1st and February 28th.  So who gets a 1099?  Every year this is a question that plagues many business owners.  Payment types are divided into categories (or boxes) on a 1099-Misc that are detailed below.  Reporting is required if the recipient is an individual, a partnership, an LLC or a sole proprietorship.  You are only required to report if the amount paid is $600 or more.  But remember that the $600 is cumulative throughout the year and not per invoice! You are not required to report payments made to tax-exempt organizations and for the most part, corporations; however, there are a few exceptions! 1099s must be issued to corporations providing the following services: