Taxpayers
are not very fond of receiving IRS Form
1099. On the other hand businesses might also not like sending these forms
out. In fact, it can rightly be said that there is not a single individual who
likes Form 1099 with IRS being an exception. The IRS or Internal Revenue
Service simply loves the 1099s because these forms make way for data matching
against the tax returns. Some of the most important things that you should know
in regard to Form 1099 prior to filing your taxes are as follows:
It is better to give the Form rather than Receiving it
Usually,
businesses bear the responsibility of issuing the 1099s to payees receiving
minimum $600 during a year. However, this is just a basic rule and there are
several exceptions to this rule. This is the reason why individuals get form
1099 for almost every bank account that they might be maintaining. This goes
even for the people who earn not more than $10 of interest income.
Many Varieties are Available
There
are different varieties available in the category of IRS Form 1099. There is 1099-DIV for dividends, form 1099-INT for
interest, form 1099-R for payouts from individual retirement accounts and
pensions, form 1099-G for unemployment benefits and local and state tax
refunds, form 1099-S for real estate transactions and form 1099-B for barter
exchanges and broker transactions. In fact, it would be right to say that there
is a dizzying assortment available. You might come across different categories.
However, remember that Form 1099-MISC standing for Miscellaneous is quite
prompt. It covers a huge territory and the largest number of questions are also
included in this type of form 1099.
Timing is Important
It
is important for businesses to send out the IRS Form 1099 to their employees by 31st January against
the previous calendar year. Nevertheless, if you do not receive form 1099, you
must not assume that you do not have the responsibility of reporting your
income. You must report your income even if you do not receive form 1099 by
February or March. Companies should remain aware of the fact that they would
have to pay penalties if they issue the 1099s late.
Beware of Changed Addresses
Change
of address information will genuinely be reported to the IRS depending on the
Social Security Number of an individual despite the fact that you receive form1099 or not. It is your duty to update your changed address with the payers
directly. You also need to carry out the responsibility of placing a kind of
forwarding order with US Post Office.
IRS also Receives Form 1099
You
might be well aware of the fact that any form 1099 that you receive is also
sent to the IRS. Deadline for mailing the forms to taxpayers is 31st
January. However, the tax payers have time till March to submit all the
completed 1099s to the Internal Revenue Service.
