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2017 1099 REPORTING UPDATE
The IRS is focusing heavily on taxpayer compliance with information reporting (Forms 1099) requirements.
Vendor payments, for which you were required to file form 1099, but did not, are not tax deductible.
New filing deadline - the IRS now requires Form 1099-MISC to be filed on or before January 31, 2018.
We will require copies of Forms 1096/1099 with your tax information.
WHO MUST FILE:
Any business, self-employed (Schedule C), rental (Schedule E), farm (Schedule F), partnership (Form 1065), corporation (Form 1120), S corporation (Form 1120S), Limited Liability Company, Estate, Trust (Form 1041), or individual in the business of renting property, which makes a reportable transaction in 2017.
REPORTABLE TRANSACTIONS INCLUDE payments in cash, check or bartered goods or services to any non-employee individual, partnership, or estate for services, rents, dividends, interest, royalties or cancelation of debt.
· Services, commission, prizes or awards, or services and materials billed together ($600 or more).
· Rents ($600 or more).
· Barter exchange (all amounts).
· Interest, Dividends or royalties ($10 or more).
· Mortgage interest received ($600 or more).
· Cancellation of debt ($600 or more).
REPORTABLE TRANSACTIONS EXCLUDE amounts paid:
· For services NOT related to your business.
· To corporations or LLCs taxed as corporations, unless for legal services.
· By credit card, debit card or other third-party payment method.
WHEN TO FILE:
· Copy due to recipient by January 31, 2018.
· Due to IRS by January 31, 2018 – NOTE CHANGE.
· Oregon requires electronic filing through I-Wire.
If you fail to file Forms 1099 and cannot show reasonable cause for the failure, you may be subject to a penalty. The penalty applies if you fail to provide the statement by the deadline, fail to include all information required to be shown on the statement, or include incorrect information on the statement. New penalties are as follows:
· $50 per information return for returns filed correctly within 30 days after the due date, with a maximum penalty $532,000 per year ($186,000 for certain small businesses).
· $100 per information return for returns filed more than 30 days after the due date but by August 1, with a maximum penalty $1,596,500 a year ($532,000 for certain small businesses).
· $260 per information return for returns filed after August 1 or not filed at all, with a maximum penalty $3,193,000 a year ($1,064,000 for certain small businesses).
· $530 minimum per information return for intentional disregard of filing requirements or failure to file a correct information return, no maximum penalty.
For more information, or assistance in complying with the above requirements, please call our office.