Important! 2022 Federal Form 1099 reporting

Important! 2022 Federal Form 1099 reporting 

General Form 1099 reporting requirements
Your business may have tax information reporting obligations for various types of payments made in the ordinary course of your business during the year. These can include interest, dividend and rent payments; however, for small businesses, these most often include payments for services made to nonemployees or independent contractors during the ordinary course of your business.  

You are required to report these payments on the IRS Forms 1099-INT, 1099-DIV, 1099-MISC & 1099NEC.

When to use Form 1099-MISC due February 28 if paper filed or March 31 if filed electronically

• $10 or more in royalties or broker payments in lieu of dividends or tax-exempt interest.
• $600 or more in rents, prizes, other income payment, medical and health care payments, and payments to an attorney.
• $5,000 or more in sales of consumer products to a buyer for resale anywhere other than a permanent retail establishment.
• Any person for which you withhold federal income taxes.

When to use Form 1099-NEC due January 31 regardless of paper or electronic

A 1099-NEC is used to report non-employee compensation. 

It is important to note that these two 1099 Forms have different due dates - the 1099-NEC must be filed with the IRS by January 31 and the due date for Form 1099-MISC, and Form 1099-INT & 1099-DIV is February 28 if paper filed, and March 31 if filed electronically.

To avoid a penalty that can be imposed for failure to file a timely informational return with the IRS, the original forms must be furnished to recipients and filed with the IRS by the required due date.

Using our firm to prepare your 1099 Forms 
If you would like us to prepare the necessary filings, please provide the necessary information to us by January 17, 2023. We have prepared an Excel template to assist you in gathering information. 

The Excel template is located here. 

If we do not receive your information by that date, we will assume you are preparing your own 1099s for 2022

In addition, please note that:

• Unless specifically requested by you by email or in other written communication, we will not be reviewing your QuickBooks file for potential 1099 required filings, Any review and analysis you request us to perform will be billed at the standard hourly rate of the staff assigned. Because we are unfamiliar with all vendors, we cannot guarantee that all potential vendors will be identified.
• To ensure that the information provided to us is accurate, please ensure that you have completed all reconciliations for the month of December prior to sending your 1099 information to us.

• Preparation of the Form 1099 will be at our normal hourly rates times actual time to complete.

Final notes regarding Form 1099 reporting

Also consider PA Form 1099 reporting requirements
While this tax blog addressed federal Form 1099 reporting requirements, it is important to also consider and be aware of certain PA 1099 reporting requirements that were addressed this prior tax blog article PA 1099 Requirements.

You are ultimately responsible for complying with IRS and PA information reporting requirements

Please note, you are ultimately responsible for meeting the IRS and PA requirements for filing 1099s. Our hope is that by providing the information and instructions in these 1099 reporting tax blog articles we can help you navigate these reporting requirements while minimizing cost of compliance by avoiding unnecessary time spent in the preparation of your 1099s.  

If you wish to further reduce your compliance cost and want to prepare and file your own 1099s, we can assist with that as well.  If you have any questions, please feel free to contact your Herbein team member.

Article contributed by Richard Williams