As a small business owner, you’re fully aware of all the government reports you’re required to file. With some of these forms come required deadlines. The upcoming IRS deadline for filing Form 1099-MISC is January 31st, which means you’re running out of time to file! So what are the IRS Form 1099 penalties you need to know for the 2019 tax season?
IRS Form1099 Penalties You Need to Know
1099-MISC Forms: Miscellaneous information return reports income from self-employment/ Independent contractors.
Your business will be heavily penalized if you fail to file the required 1099 series forms by the deadline, failure to include all the required information, file incorrect information or paper file when you’re required to e-file.
Penalty amounts depend on the date the correct form is filed or when the correct payee statement is provided. Any penalties for failing to file an accurate return are separate from failing to submit the correct payee statement.
Failure to File IRS 1099 Series Forms
If you don’t file your 1099 forms by the deadline, you’ll be penalized $50 per form for the first 30 days, with a maximum penalty of $194,000 for small businesses.
What are the Form 1099 Deadlines?
January 31st: All 1099 Recipient Copies are Due
January 31st: Form 1099-MISC 2019 Deadline (Both Paper, Electronic and Recipient)
February 28th: Paper Filing
March 31: Electronic Filing
Filing more than 30 days after the deadline but prior to August 1st brings a penalty of $110 per form. Filing 1099 Forms after August 1st or failing to file corrections increases the penalty to $270 per form, with a maximum fine of $1,113,000 for small businesses.
The IRS considers a small business as one earning an average of $5 million or less per year for the past three tax years.
How to Avoid Form 1099 Penalties and Interest
Don’t forget that 1099-MISC information returns reporting income from self-employment, interest and dividend, or independent contractors to the IRS are due by January 31st.
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