1099-MISC Basics

All Businesses, government agencies, nonprofit agencies, and even churches must file Form 1099-MISC when they make payments that require it. Few actually file them properly and the penalties can literally ruin your business!

All Businesses, government agencies, nonprofit agencies, and even churches must file Form 1099-MISC when they make payments that require it. The problem is, few actually do. In this course you will learn why filing Form 1099-MISC is important, who must file, who you need to send it to, the info you need from vendors and how to complete Form 1099-MISC.

Over the past few years, the Congress and the U.S. Treasury Department have taken aggressive steps to ratchet up enforcement of Form 1099 compliance by small business and organizations.

Their goal: to reduce the tax gap, the difference between the amount they should be collecting and the amount of tax actually collected. It is the IRS’s long-standing belief that the largest cause of unpaid tax in the US is the result of businesses and organizations not filing Form 1099-MISC. In their most recent enforcement action (2015), Congress doubled the penalty for businesses who do not file forms 1099, the second major increase in the past few years.

The penalty for not filing any return, including Form 1099-MISC, increased to $250 per form ($260 at the time of my writing due to inflation). The Intentional Disregard penalty increased to $500 per form (now $530). Worse yet for small business owners, these penalties can be applied separately to 1) Not filing the forms with the IRS, and 2) Failing to provide a copy to the recipient, effectively doubling them! The potential penalty for not filing a single 1099-MISC? $1,060 per unfiled 1099-MISC!

These penalties can literally, put you out of business!

Want to avoid these costly penalties? You need to know the rules. Do not rely on your outsourced bookkeeper or tax preparer to handle this for you. Bookkeepers seldom have the information they need to file your 1099s and tax season starts too late to meet the deadlines. You need to know the rules! Avoid 1099-MISC Penalties! Learn what you need to know to keep your business, organization, or your business clients in compliance. Take our 1099-MISC Basics Course!

Remember, the potential penalty for not filing a single 1099-MISC? $1,060 per unfiled 1099-MISC!

Lesson Listing

Here is a list of the lessons in this course and a brief description of what you'll learn in each lesson.

Introduction and Penalties
This lesson provides an overview of the Form 1099-MISC Basics Course, the function, and purpose of Form-1099 MISC, and the most persuasive reason to file all required Form 1099-MISC(s): Gigantic penalties! For more information on the IRS’s struggle to get businesses to file Form 1099-MISC check out Brett’s Article Form 1099-MISC Noncompliance (Can Literally Destroy Your Business).
Who Must File Form 1099-MISC
Businesses must file Form 1099-MISC when they make payments that require it. The rules, however, are not as simple as they may seem. This lesson will cover the most common types of payments that require Form 1099-MISC and the payees that must receive Form 1099-MISC.
Box 1 - Rents
Many owners and managers are surprised to learn that many types of rent require the filing of Form 1099-MISC. This lesson will cover the forms rent payments that require a Form 1099-MISC and the payees required to receive it.
Box 7 - Nonemployee Compensation
The most common payment businesses make that require a Form 1099-MISC are those made for services to businesses and individuals that are not employees of the payer. This lesson will review the many forms of nonemployee payments that require a Form 1099-MISC (and a few that don’t). It will also cover payees required to receive Form 1099-MISC (and a few that aren’t).
What You Need to File Form 1099-MISC
In order to properly file Form 1099-MISC you must obtain some important information from each payee. This lesson highlights this information and why obtaining it PRIOR TO paying potential 1099-MISC recipients is so important (hint: it involves avoiding more gigantic penalties). It will also review Form W-9, the most common form used to obtain this information, and Form 1096 which must accompany Form 1099-MISC(s) sent to the IRS.
Completing Form 1099-MISC and Form 1096
This lesson will discuss the various copies of Form 1099-MISC and to whom (and under what circumstance) each copy must be sent. Lesson Six also covers the various - box-dependent - due dates for Forms 1099-MISC, and provides step-by-step instruction for the proper completion of Form 1099-MISC and Form 1096. Finally, it will show you how to timely file Form 1099-MISC and Form 1096 with the IRS.

All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.

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