Beaird Harris will be closed on Friday, July 3rd in observance of the Independence Day holiday.
In an effort to provide you with more timely and cost effective service for Forms 1099, we’re offering three options for compiling and submitting the data for 2018 forms. One option allows you to handle the filing yourself, and two other options involve our assistance.
If you would like to prepare your own 1099s this year, the necessary forms can be purchased from your local office supply store (such as Office Depot). Alternatively, we are happy to provide you with the necessary 1096/1099 forms to prepare up to four (4) 1099s.
You can fill out the worksheet included in the email you received and return it electronically via the link provided in the same email. We will prepare 1099s for only the vendors listed on these worksheets. We will not sort through your QuickBooks file for any data. We will rely solely on the data provided by you on these worksheets. The fees to prepare the 1099s under Option 2 will be based on the number of forms submitted for preparation. The fee for up to two (2) 1099s will be $275. Each form in excess of two (2) forms will be $25 per 1099.
You will provide us with a QuickBooks back-up and we will review it for possible 1099 recipients. This is a much more time intensive preparation process, as it involves us reviewing all of your QuickBooks activity, mapping the correct accounts, and properly setting up the vendors. We will also have to go back and forth with you on a number of payees to try to determine if 1099s are needed. Please understand this process by nature involves a lot of guesswork on our part. As a result, this service will be significantly more costly than option 2. The fees for this option will be based on our time incurred with a minimum fee of $800, which includes up to four (4) 1099s. Each form in excess of four (4) forms will be $25 per 1099.
If you would like our assistance in preparing the forms, we must receive your 1099 information in our office by Monday, January 6, 2020 to guarantee completion by the filing deadline of Friday, January 31, 2020. In fairness to all of our clients, 1099s will be prepared in the order in which they are received along with other year-end payroll reports.
Who is Eligible For a 1099?
The IRS wants to know if you made any payments during the tax year that would require you to file Form(s) 1099, and if so, that you did file all required Form(s) 1099. Please make sure you carefully read and understand the above 1099 reporting requirements and that you are in compliance. By not remaining in compliance, you greatly increase your chances of an IRS audit. We, as tax professionals, are also required to ask if you have filed all required Form(s) 1099 when we prepare your income tax return.
The filing deadline to provide your vendors with 1099s is Friday, January 31, 2020. Failure to submit your forms by the deadline will lead to penalties. The IRS is now actively enforcing 1099 late filing penalties. The penalty typically ranges from $50 – $1,000 per 1099, depending on the timing of the filing delinquency.
Please note that both the Texas Workforce Commission and IRS care a lot about who you classify as an independent contractor versus an employee. There are substantial penalties for misclassification of workers. The determination factors are outside the scope of this letter, but if you have any questions about whether a worker is an independent contractor versus an employee, please let us know and we can assist you with that determination. With a new year comes the opportunity to get a clean start on this issue if needed!
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