If you pay your service providers over $600 per year, you may need to report the payment to IRS via 1099-MISC if the service providers are not corporation.
The filing of 1099-MISC to the recipients remains unchanged which is still January 31. However, the filing to the government has been changed from Mar 31 to Jan 31 which bring a huge impact to small business owners. That means you should not close your 2016 books after Jan 31 ideally in order to capture all the payments subject to the filing.
The penalties for information returns that are late would be ranged from $50 per return to $260 per return. Don’t overlook the consequence of such non-compliance.
In order to meet the compliance, I recommend you get your vendors W-9 before you pay them. In this way, you get their tax ID, legal name and address prior the year end.
If you have any question, please contact us.
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