Another year, another change to 1099s.
Don't worry, it's not as bad as the epic back and forth of the past few years, as Congress decided to impose burdensome new requirements, the small business community fought back, and then Congress (typically) fought childishly among themselves about how to pay for a repeal.
When you have to submit 1099s, thankfully, remains pretty much the same for the end of the month filing deadline. CBS MoneyWatch has a handy run-down if you need to brush up. The post lays out how the rules stand now:
So what has changed from previous years? Simply the degree to which the IRS is cracking down on non-compliance. Penalties have gone up, according to accountant Bruce Phillips, a Xero Gold Partner and managing member of Harshman Phillips & Company.
"For 1099s required to be filed by January 31, 2013, the penalties for failure to timely file have increased. If your 1099s are filed less than 30 days late, the penalty is $30 per 1099. If your 1099s are filed more than 30 days late but before August 1, 2013 the penalty is $60 per 1099. If your 1099s are filed late on August 2, 2013, the penalty is $100 per 1099," he told Inc.
It is possible, as my colleague Chas Rampenthal has pointed out, to get an extension and avoid these penalties, provided you have a good reason and inform the IRS promptly.
The IRS also has one more trick up its sleeve to keep you honest. "As of 2011 on all federal business tax returns a box was added asking whether any payments were made during the year that would require Form 1099 to be filed and a box was added asking whether or not you filed all required Forms 1099," Phillips explained. "When tax payers sign their tax returns, they are stating that, under penalties of perjury, to the best of their knowledge their tax return is accurate and complete. If all Forms I099 are not filed, they could be held liable in the event of an audit."
The bottom line: "It is becoming more and more important that taxpayers comply with all l099 reporting requirements," concluded Phillips. The good news, at least, is many tax preparation tools have added features to make this easier.
Are you fully prepared for tax season this year?