New 1099 trap
Tuesday, January 10th, 2012
Business tax returns for 2011 contain new questions about Form 1099 that may trap you if you overlook issuing 1099s this January. The questions appear on Form 1040 Schedules C (sole proprietorships), E (rental), and F (farms). They also appear on partnership (1065) and corporate (1120 and 1120S) returns.
The questions:
- Did you make any payments in 2011 that would require you to file Form(s) 1099?
- If “Yes,” did you or will you file all required Forms 1099?
Like the rest of the tax form, you must answer the questions truthfully under penalty of perjury (read the signature area). So take the time now to determine if you must issue any 1099s and get the process started. The deadline for issuing 1099s is January 31. More info from IRS.gov here.
These tax return questions are part of a larger IRS effort to crack down on the issue of employees vs. independent contractors, which they say costs the government billions of dollars in uncollected taxes. We’ve developed a white paper that helps you learn how to protect your company from this latest compliance push. Just click the email address or fill in the contact form and mention that you would like to receive the white paper, and we’ll send it to you without delay.
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