Sax Cautions Employers Filing 1099s To Review Compliance Procedures

Sax Cautions Employers Filing 1099s To Review Compliance Procedures

Non-compliance, the firm stresses, could result in significant penalties for employers

January 03, 2017 ( datsyn.com) – The accounting and financial services firm Sax LLP has posted information to its website advising employers to review all compliance procedures related to filing 1099 tax forms.

The update, posted by Sax LLP in the Tax Updates section of their website, acknowledges that no significant changes to the 1099 filing requirements were made over the course of 2016 outside of a change in their due dates. 1099s, according to the posting, must be issued to the recipient employee by January 31, 2017. Another form, Form 1096, must be submitted along with Form 1099 to the Department of the Treasury by February 28, 2017. Form 1099-MISC, which comes into play if an amount is included in box 7—nonemployee compensation—of the 1099, must be submitted to the IRS by January31, 2017.

Though these new filing dates are the only major changes to the 1099 compliance procedures, Sax maintains that employers must still be aware of the guidelines in order to avoid paying steep penalties and being mandated to provide details about the 1099s on their business tax return.

Sax’s overview of the guidelines for 1099 reporting begins by stating generally that such reporting is required on a calendar-year basis. It includes the payee’s name, address, social security or employer identification number, and also includes both the amount paid to them and any related federal tax withheld from them.

Businesses that need to obtain the social security number or employer identification number from a payee must use Form W-9, Request for Taxpayer Identification Number and Certification. Businesses must make sure that they use the version of Form W-9 with a revision date of December, 2014, as earlier versions of the form do not meet IRS requirements.

Businesses must send the 1099 forms must be sent both to employees and to the Internal Revenue Service. When sent to the IRS, they must be accompanied by Form 1096. A separate Form 1096 must accompany each 1099 return sent (no matter the type). For more information on this process, Sax LLP refers individuals and businesses to the Forms & Publications page on the IRS website.

Sax LLP concludes their overview of 1099 instructions by listing and describing the various types of Form 1099 that may be necessary. Form 1099-MISC is filed by a business who made total calendar year payments to any payee for any service of $600 or more. 1099-R forms are used for distributions (made both to individuals and to IRAs or certain other plans) from pensions, annuities, IRAs and other plans. Form 1099-DIV is used to report paid dividends, while 1099-INT reports interest payments.

Further details regarding each of these forms can be found at www.saxllp.com/category/news-events/tax-updates/ and on the IRS website.

Sax LLP is a multi-disciplinary accounting, tax and financial firm offering a variety of services to businesses, non-profit organizations and high net-worth individuals.

 

Source: PR