Do you 1099? I hope so! January 31st is the deadline for businesses to mail 1099s to vendors that they paid $600 or more in 2010. Many small business owners don’t realize that includes all legal fees (they are not subject to the $600 limit) and rent. I’m always amazed how many bookkeepers don’t know this, either! “We’ve never done that before” is the comment that I hear from new or prospective clients.

Did you know that “non-employee compensation” is just one of the 68 categories on 1099 forms? Form 1099 Misc is the form that most familiar with, but there are 15 other types of 1099.

Guess what? The IRS doesn’t care whether you know the rules or not. Their rules and the penalties for not complying stand. Penalties can be as higher as $100 per form so non-compliance is not a wise business decision.

New rules for 1099s went into effect as of 1/1/11 with substantial changes. Every vendor that you pay $600 or more must receive a Form 1099. This includes services and products from corporations. Anything that you write a check for or pay cash for after 1/1/11 will require your business to issue a 1099 form next year. One small business owner who heard me speak recently told me that he buys products from 3,000 vendors. He certainly didn’t like hearing that all of them will need to receive a 1099 at year-end. This new law is part of the healthcare law so if that is overturned this massive burden on small businesses will go away. Cross your fingers!

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One Response to Do You 1099? The Deadline is Approaching Fast!!
  1. Lx6hi1 Very true! Makes a change to see someone spell it out like that. 🙂


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