As a small business owner, you are well aware of the slew of government reports you must file. Starting this tax season you will need to file certain forms sooner than you did in previous years. The IRS deadline for filing Form 1099-MISC is January 31st. Which mean you can not wait to file! So what are the IRS 1099 Form penalties you need to know for the 2017 tax season?
IRS 1099 Form Penalties You Need to Know
1099-MISC Forms: Miscellaneous information return reports income from self-employment/ Independent contractors
What Penalties Could My Small Business Face?
Your business will be heavily penalized if you fail to file the required 1099 series forms by the deadline, fail to include all required information, file incorrect information, or if you paper file when required to e-file.
Penalty amounts are based on the date the correct form is filed on or when the correct payee statement is provided. The penalty for failing to file an accurate return is separate from failing to submit the correct payee statement.
Failure to File IRS 1099 Series Forms
January 31st: All 1099 Recipient Copies are Due
January 31st: Form 1099-MISC 2018 Deadline (Both Paper, Electronic, and Recipient)
February 28th: April 2nd (Electronic): Paper Filing 1099 Form Variations Deadline
If you fail to file 1099 series forms by the deadline you will be penalized $50 per form if submitted within 30 days following the due date. The maximum penalty is $532,000 per year or $186,000 for small businesses.
Filing more than 30 days after the deadline but before August 1st raises the penalty to $100 per form, with a maximum fine of $1,596,500 per year or $532,000 for small businesses.
Filing 1099 Forms after August 1st or failing to file corrections will increase the penalty to $260 per form, with a maximum fine of $3,193,000 per year or $1,064,000 for small businesses.
How to Avoid Form 1099 Penalties and Interest
TaxBandits, Full-Service Tax Filing Solution
Now that you understand the penalties and what they entail, I am sure you will avoid having to pay them. Remember that 1099-MISC information returns reporting income from self-employment, interest and dividend, or independent contractors to the IRS are due by January 31st.
To avoid penalties use our sister product, TaxBandits to e-file and pay any owed taxes on time with our quick, easy and secure step-by-step filing process. We provide filers built-in error checks, bulk upload data and experienced US-based customer support.
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