2011 Form 1099 Reporting Requirements
2011 Form 1099 Reporting Requirements
Persons engaged in a trade or business that make payments aggregating $600 or more during the tax year to a single payee in the course of the taxpayer’s trade or business generally must file a Form 1099 information return. Payments currently subject to reporting include making payment in the course of such trade or business to another person, of rent, pasture rental, fees, commissions, nonemployee compensation, premiums, annuities, compensations, interest, dividends, but they do not include payments for goods.
Some payments are not required to be reported on Form 1099 and include payments to corporations, unless for legal services, and payments for merchandise, telegrams, telephone, freight, etc.
When to file – For calendar year 2011, returns should be filed by February 28, 2012. We suggest that the recipient receive their copy by January 31, 2012. You can get a 30 day extension.
Be aware - Increased Penalties
There is increased information reporting penalties that were mandated by the Small Business Jobs Act. The first-tier penalty for failure to timely file an information return was increased from $15 to $30, and the calendar-year maximum from $75,000 to $250,000. The second-tier penalty was increased from $30 to $60, and the calendar-year maximum from $150,000 to $500,000. The third-tier penalty was increased from $50 to $100, and the calendar-year maximum from $250,000 to $1,500,000. For small business filers, the calendar-year maximum increased from $25,000 to $75,000 for the first-tier penalty; from $50,000 to $200,000 for the second-tier penalty; and from $100,000 to $500,000 for the third-tier penalty. The minimum penalty for each failure due to intentional disregard increased from $100 to $250.
The increased penalties will be adjusted for inflation every five years.
The Small Business Jobs Act also similarly increased the penalties for failure to provide correct payee statements in addition to the information reporting penalties.
The increased penalty amounts were effective Jan. 1, 2011, and remain in effect after the repeal of the expanded 1099 reporting requirements.
Form W-9
Use Form W-9 attached to request the taxpayer identification number of a U.S. person and to request certain certifications and claims for exemption. If the payee does not provide a taxpayer identification number, you are generally required to backup withhold on any payments you make to the payee.
