When are 1099s Due?
A 1099 form is a type of IRS tax form used to report different types of income other than wages, salaries, or tips.
These forms are commonly used to report payments made to independent contractors, lawyers, rental property income, sales proceeds, income from interest and dividends, etc.
The payer completes the 1099 forms and sends copies to the payee, IRS, and to the State.
In simplest terms, the purpose of the 1099 form is to keep track of income.
For example, independent contractors, freelancers, and lawyers will receive 1099-MISC or 1099-NEC forms from their clients.
The form reflects the money the client has paid them during a given year.
Form 1099’s include the recipients SSN or Taxpayer Identification Number and so the IRS will know if they have reported the income or not.
Types of 1099 Forms
The most common type of 1099 form used is the 1099-MISC and as of 2020, the new 1099-NEC is the second most popular.
But did you know there are actually over a dozen different types of 1099 forms?
In case you were curious though, here is a complete list of all of the different types of 1099 forms:
- Form 1099-A – Acquisition or Abandonment of Secured Property
- Form 1099-B – Proceeds From Broker and Barter Exchange Transactions
- Form 1099-C – Cancellation of Debt
- Form 1099-CAP – Changes in Corporate Control and Capital Structure
- Form 1099-DIV – Dividends and Distributions
- Form 1099-G – Certain Government Payments
- Form 1099-H – Health Coverage Tax Credit (HCTC) Advance Payments
- Form 1099-INT – Interest Income
- Form 1099-K – Merchant Card and Third Party Network Payments
- Form 1099-LTC – Long-Term Care and Accelerated Death Benefits
- Form 1099-MISC – Miscellaneous Income
- Form 1099-NEC – Non-employee compensation
- Form 1099-OID – Original Issue Discount
- Form 1099-PATR – Taxable Distributions Received From Cooperatives
- Form 1099-Q – Payments From Qualified Education Programs (Under Sections 529 and 530)
- Form 1099-R – Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Form 1099-SA – Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
The 1099-MISC is sort of like a catch-all form and should cover most of the types of income that you’ve paid a contractor, freelancer, lawyer, etc.
The 1099-NEC is a new form that the IRS rolled out in 2020 and this is to report money paid to people who did work for you but are not employees.
This is mainly for work you contracted out.
Both forms only need to be completed for non-employee compensation of $600 or more to a payee.
When are 1099s Due?
As of January 14, 2021, the IRS announced that the deadline to file most 1099’s is February 1st.
This means that forms must be both mailed to the recipients as well as the IRS and State on or before February 1st to avoid any late penalties.
If mailing on February 1st, you may want to consider getting your mail certified to prove it was mailed on or before the deadline.
Unfortunately, filing late has some pretty steep penalties:
- $50 penalty per form for 1099’s file 1 – 30 days late
- $110 per form filed more than 30 days late but before August 1st
- $270 per form filed after August 1st
- $550 per form for intentionally neglecting to file at all
In case you missed it, that is the penalty per form!
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IRS.gov "Businesses have Feb. 1 deadline to provide Forms 1099-MISC and 1099-NEC to recipients" Page 1 . April 28, 2021
IRS.gov "Increase in Information Return Penalties" Page 1 . April 28, 2021
SBA.gov " Year End Requires Reporting to IRS and SSA" Page 1 . April 28, 2021
IRS.gov "About Form 1099-NEC, Nonemployee Compensation" Page 1 . April 28, 2021