2022 - 1099 Filing Requirements
The IRS requires that all 1098, 1099-NEC (Non-Employee Compensation) and 1099-MISC forms to be issued to recipients by January 31, 2023. Form 1099-NEC must be transmitted to the IRS by January 31, 2023, and Form 1099-MISC is due to the IRS by February 28, 2023 (March 31 when e-filed).
Our 1098/1099 service includes all filing, postage and handling to the IRS and your payees. 1099 and 1098 Forms are electronically filed to the IRS by our office. Your file copy is securely delivered to you electronically, unless otherwise requested. For information regarding pricing, please call our office.
Submit your payee records by fax (419-872-2338), use our Secure Portal, or email to dan@branghamcpa.com. All 1099 information should be submitted no later than midnight Thursday, January 26, 2023, to allow for sufficient time to process your request by the deadline.
Information can be submitted using the following forms or providing organized records providing all the information below.
- 1099 Information Sheet - Printable PDF
- Federal W9 - Printable PDF
Required Information To Include in Your Submission:
1. Payer Information
- a. Business Name
- b. TIN
- c. Address
- d. Contact Name and Phone Number
2. Each eligible recipient (payee):
- a. Payee Name and current mailing address
- b. Payee Taxpayer Identification Number (SSN or EIN)
- c. Total amount paid to that payee in 2022
- d. Payment type (1099-NEC, 1099-MISC, -INT, -Other, 1098 Mortgage Interest, etc.)
- e. Indicate for each payee if you wish to add TIN matching service.*
3. If your subcontract labors or service providers perform their services for you in locations other than where your main office is located, you will also need to provide a breakdown of payments by work location to comply with local municipality reporting requirements.
What You Should Know About Your Responsibility for Filing 1099 and 1098 Forms with the IRS
| Type | What to Report | Requirement to File |
|---|---|---|
| 1099-NEC | Payments for services performed for a trade or business by people not treated as its employees. Examples: subcontracted labor, directors. |
$600 or more (required if recipient is not incorporated) Exception: payments made by credit card or third-party originators are not reportable on the NEC. |
| 1099-NEC | Payments paid to an attorney for services provided to your business |
$600 or more (regardless of entity classification) Exception: payments made by credit card or third-party originators are not reportable on the NEC. |
| 1099-MISC |
Rent or royalty payments your business paid to others, prizes and awards for services, such as winnings on a TV or radio show |
$600 or more (required if recipient is not Incorporated) |
| 1099-Interest | Interest income you recieved on loans. | $10 or more |
| 1098 | Mortgage Interest you received in the course of your trade or business from individuals and reimbursements of overpaid interest. | $600 or more |
THE IRS HAS AN EXPECTATION THAT YOU EXERCISE YOUR DUE DILIGENCE: The IRS requires you to obtain the information from your payees as soon as the payee has a reportable payment. You can us the IRS W-9 Form or alternative method. We encourage you to use the W9 Form as the payee is certifying on a federal document that the information provided is accurate.
Backup Withholding and Withholding Payments Requirements. Reportable payments to payees are subject to immediate backup withholding of 24% on all reportable payments when the payee has NOT provided you with a TIN, or has provided you with an obviously incorrect TIN. Backup withholding is also required to begin immediately if you receive a notice from the IRS directing you to do so. Backup withholding is submitted to the IRS similarly to payroll liabilities and reconciled annually using Form 945. It is important to note that if you fail to backup withhold and were required, the IRS can hold you, the payer, liable for all of the tax that should have been withheld but was not.
Penalties for Non Compliance. The IRS has significantly increased penalties for late filing and non-compliance of information returns. 1099 non-compliance penalties are assessed on a per payee basis. Be aware that the IRS also levies penalties on both sides of the compliance: 1) failure to file with the IRS, and 2) failure to furnish to the payee. The two-sided penalty can result in a total penalty of up to $560 per payee. Further penalties can be levied on the payer if it is determined there was a willful disregard to file 1099 forms. The potential costs for non-compliance add up quickly and could be catastrophic to a small business. [Schedule of Penalties]