It is necessary for you to get form 1099 if you receive money from a government or business entity during the year which is reportable on your taxes. File 1099 online by taking the services of various online filing service providers. However, prior to considering to e-file 1099 make sure that you have a basic understanding of the form. It is in no ways a tax document but an informational form that needs to be filled out by an individual if he or she receives money during the year of reportable taxes. There are different varieties of 1099 forms and 1099 reporting to the IRS is very important. This is because with this kind of reporting the government is informed about the income you have even if you do not mention it in the tax return. However, if the IRS discovers that you have not reported additional taxes owed in the form, it will send notifications and charge penalties along with interest beginning right from the first day of the late tax payment.
The types of 1099 forms you may receive are as follows:
· Form 1099-K; an IRS reports the payment card and third party network transactions.
· Form 1099-MISC; reports payments to independent contractors.
Efile your 1099 forms without penalties and late filing fee by January 31, 2017, for 2016 tax season.
Failure to E-File 1099 Forms on Due Dates
The IRS will penalize companies for not filing 1099s before the due date and for incorrect 1099s forms. Companies/Individuals should issue all 1099 forms including 1099-MISC forms by January 31 for the previous tax year. IRS 1099-K and 1099-INT forms are must issue by January 10. If filing by paper, businesses must file these 1099 forms with the IRS by February 28. If filing electronically, companies must e-file the 1099s with the IRS by March 31.
Penalty for Making Late Payments
There is a definite penalty for not filing 1099 and even for making late payments. You can always expect the Internal revenue Service to impose a penalty for late filing 1099. This penalty is around 0.5% per month or partial month during which the taxes remain unpaid. The penalty is generally capped at 25%. In case 1099 earning that you complete forget to mention on your tax return gives way to an understatement of the tax bill, the penalty for 1099 late filing increases to 20% accruing immediately. Therefore, if you are looking to avoid a penalty for not filing 1099-MISC then it is necessary for you to amend your tax returns. Make sure to go through the form carefully and include all taxes owed.