Skipping 1099 Filing is a Big Deal
It’s time to take 1099 filing seriously as the IRS does.
Skipping 1099 filing even for a few of the independent contractors you worked with comes with potential penalties. Strict compliance of 1099 filing is continuously enforced by the IRS and you must be aware that failure to file those forms or even late 1099 filing has serious implications.
To avoid the troubles caused by potential penalties, the IRS now asks two questions on all Federal Income Tax returns:
- Did the corporation make any payments in (year) that would require it to file Forms(s) 1099?
- If “yes,” did or will the corporation file required Forms 1099?
Responding to these questions indicate (under penalty of perjury) that your tax return, including 1099 filing, is correct and complete.
What You Must Know About 1099 Late Filing Penalty
In particular, failure to provide an accurate statement (intentional disregard) bears a penalty of $250 per 1099, with no maximum for the year.
Whereas when it comes to late filing of mandatory 1099 forms, it could lead to penalties amounting to $30 to $100 per 1099 form, and with a maximum penalty of $500,000 annually for a small business–a big amount that goes to show why it pays to be mindful of your tax-filing deadlines.
Penalties Imposed are Based on When the Correct Information Return is Filed. Below is a more Detailed Explanations of 1099 Penalties:
$30 per 1099
This applies if filing is made within 30 days of due date; maximum penalty of $75,000
$60 per 1099
This applies if filling is made beyond 30 days after the due date but not later than August 1; maximum penalty of $200,000
$100 per 1099
This applies if filing is made after August 1; maximum penalty of $500,000