What are 1099’s?

Business owners are required to send a Form 1099 to each person and/or business to which they paid more than $600 total in cash or check during 2018. If you’re a real estate investor who borrows or lends money (including gap funding), or do business with foreigner(s), have a joint venture partner, you may have other additional return filing requirements. Please call us for specifics.

form 1099

File Form 1099-MISC for each person to whom you have paid during the year:

• at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;

• at least $600 in:

  • rents;

  • services performed by someone who is not your employee;

  • prizes and awards;

  • other income payments;

  • medical and health care payments;

  • crop insurance proceeds;

  • cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish;

  • generally, the cash paid from a notional principal contract to an individual, partnership, or estate;

  • payments to an attorney; or

  • any fishing boat proceeds.

Other forms you may be required to file:

• Form 1099-S proceeds from real estate transactions.

• Form 1098 Mortgage Interest statement.

• Form 1099- INT Interest Income received.

• Form 1099-DIV Dividend Income received.

• And other forms specific to transactions with foreign partners, lenders, vendors, etc. ,may be required.

Form 1099-K: Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K. Businesses that accept credit card payments will receive a 1099-K from the credit card processor. This is not something you need to prepare but may receive. If you do, please provide a copy to us so that we can use it in preparation of your return.

Penalties for not filing correct information returns and/or not furnishing correct payee statements have increased and are now subject to inflationary adjustments.

Examples of affected forms include: Forms 1098, 1099, W-2G and W-2.

The amount of the penalty is based on when you file the correct information return or furnish the correct payee statement. The penalty for not filing a correct information return is separate from the penalty for not providing the correct payee statement. For example, if you don’t file a correct Form 1099-MISC with the IRS and don’t provide a correct Form 1099-MISC statement to the payee, you may be subject to two separate penalties.

To Avoid Penalties:

Employers and Businesses must send requisite copies of the forms to the IRS or the Social Security Administration by January 31, 2019 for both paper and electronic forms.

Employers and Businesses must send requisite copies of the forms to the recipients by January 31, 2019 as well.

If we will be preparing your 1099(s), all information must be submitted to us BY Sunday, JANUARY 13, 2019 to guarantee filing is completed by the deadline. For clients outside the U.S. inquiring about this email, please contact Frankie Moon directly at Frankie@profitprocpa.com. For all other clients in need of assistance please contact clientservices@profitprocpa.com or through your client portal ATTN:1099.

Pricing: $135 set-up fee (first year only) plus$10 per 1099 form which includes preparation and mailing of 1099(s) and submission to the IRS.

Below is an example of the 1099-MISC IRS Copy A (Note: A special “RED” copy must be sent to the IRS, or e-filed as we do for you).

Below is an example of the W-9 form that you should have (potential)1099 recipients complete, ideally BEFORE you pay them. This is available at irs.gov.

The information was sourced directly from the IRS web page.