The IRS 1099 tax form Online can be a confusing concept for small business owners and freelancers. Many small business owners are afraid of not meeting the tax filing requirements. The 1099 tax form is also often overlooked in favor of the W2 tax form. This blog will illustrate the common misconceptions around the 1099 tax form and how it works.
Table of Contents
- #1: Issuing a 1099 Tax Form Online to Corporation
- #2: Skipping to report the 1099 Contractor Income
- #3: Sending 1099 tax Form Returns only to the recipient
- #4: Form 1099 Deadline doesn’t matter
#1: Issuing a 1099 Tax Form Online to Corporation
While filing 1099 Tax Forms at the year-end, the most common misconception is issuing a 1099 Tax Form Online to Corporation. Generally, 1099 Forms are used by the businesses to report the income paid to the contractors of $600 or more throughout the tax year. The individual whom you paid can be a:
- Partnership, Self-employed, independent contractor, freelancer, estate, etc
- Also, single-member Limited Liable Corporation
In case, if the payment is made to an individual who is a C or S corporation member, then don’t report those payments on 1099. Because the IRS instructs the businesses to not include the payments made to a corporation on a 1099 Tax Return.
#2: Skipping to report the 1099 Contractor Income
Another common misconception about 1099 is that skipping these forms makes no difference. Neglecting to report information to the IRS is never a good idea. If you believe you should be filing 1099, then chances are you should. Rather than skipping this task.
You may enjoy filing 1099, but if the IRS discovers that you hired contractors and did not declare the income they earned, you could end up paying fines and fees.
#3: Sending 1099 tax Form Returns only to the recipient
There is more to know about sending a form 1099 than simply delivering it to the recipient. You must also send a copy to the IRS as well as the recipient’s state or province. If you are the payer, you must send a copy of the 1099 form to the Internal Revenue Service (IRS). If the recipient is in another state or province, you must also send a copy of the 1099-MISC form to that state or province. However, some states do not require businesses to send state copies of 1099 to them.
#4: Form 1099 Deadline doesn’t matter
If you are a small business owner, you have probably heard or read about the deadline for filing 1099 forms. Many people believe the 1099 deadlines are fair and are not too strict. However, the penalties for missing the IRS 1099 tax form deadlines are very stiff. In fact, they could put your business at risk if you are not careful. It is important to be proactive and make sure you have the proper tools in place to ensure you are meeting the IRS 1099 tax form filing deadlines.
Overlooking or mismanaging irs 1099 tax form online can have disastrous consequences. As a small business owner, you may be dealing with a lot of different tasks. However, it is essential that you handle the IRS 1099 tax forms correctly. We hope you found our post on the most common misconceptions helpful. If you have any questions, please contact our accounting department at Form1099Online. We are always happy to help you!