There are some important steps that you need to follow when submitting form 1099 prior to filing deadlines. Some of these steps have been provided below.
Simple Steps to Filling 1099 form Before Deadlines
Step 1: Gathering the Information Needed
Prior to completing and submitting form 1099, it is necessary for you to have some information handy for independent contractors and the information is as follows:
· Total compensation amount paid to the independent contractor during a particular tax year.
· Legal name of the contractor
· Address of the contractor
There is a standard way of obtaining this information and that is having the contractor fill out form W-9. This a form which collects the taxpayer identification number of the contractor along with tax classification, business name, address and the legal name. the best practice is having a W-9 on file for every independent contractor hired. Having the independent contractors filling out and returning the W-9 to businesses is considered one of the most important administrative jobs that businesses complete post engaging the services of these contractors. Businesses can always check their bookkeeping records for confirming the amount paid to the independent contractors during one whole year.
Step 2: Submitting One Copy to Independent Contractors
Once the businesses have the information that they require, they can use this information for filling out form 1099. Their next step would be mailing section “Copy B” to the independent contractors within 1st February.
Step 3: Submitting One Copy to the Internal Revenue Service
Copy A of the form needs to be submitted to the Internal Revenue Service within 28th February if an individual or a business is filing by mail. If the filing procedure is being carried out electronically then the deadline is a 31st march. Depending on the location of the business, business owners might also need to file 1099s with their states. Therefore, it is important for them to check in with their state department of taxation in order to make sure that they are compliant with the local requirements of form 1099 filing.
Deadline Information on Form 1099 Filing for the Independent Contractors
While it is completely the responsibility of an independent contractor’s client to send the contractor a copy of form 1099 within 1st February, independent contractors are required to file their income taxes in the month of April. In case they do no receive the form from their clients within 1st February, they need to request the form.
Consequences of Missing the Filing Deadline for Form 1099
Missing the filing deadline for form 1099 should not be taken as the end of the world. However, independent contractors will be required to bear certain penalties for late 1099 form. The penalties are as follows:
· $30 for filing within 30 days late
· $60 for filing more than 30 days late but within 1st August
· $100 for filing on or after 1st August
In case, an independent contractor intentionally fails to file form 1099, he or she might be subject to a penalty of minimum $250 per statement without any maximum.