Form 1099 for Services, Rents, Royalties And Interest paid
need to be sent out by January 31,
If you want us to prepare Forms 1099 for you, submit the PAYEE INFORMATION FORMS by January 10th, . Upload this form to our Portal - do NOT email it - never email anything with a social security number.
The 1099 reporting rules are ever more complicated this year. Our fee for preparation and filing Forms 1099 is $140 for the first one plus $60 for each additional. This includes preparation of the forms, mailing them to the recipients, and filing with the government.
To keep your cost down we encourage you to gather your information in full before sending it to us.
Additional bookkeeping required to calculate amounts or hunt down information will be billed hourly.
Government correspondence or other related issues will be billed hourly and are not included in the fee for preparing the 1099 Forms.
We are not responsible for any penalties and/or interest for treating employees as independent contractors or submitting incorrect/late information to us.
The penalty for late filing can be as much as $280 for each Form 1099.
If in the course of your business you have paid for independent contractor services (including parts and materials) or have paid rents (such as for office space or equipment) a Form 1099 must be issued. Fees paid to accountants and lawyers are to be reported.
- You must issue a form 1099 to: any individual, partnership or LLC that your business paid $600 or more in for services (including related parts and materials) or rent.
- You must issue a form 1099 to: any individual, partnership or LLC that your business paid $10 or more in for royalties or interest.
- Only include amounts paid by cash, check, money order, wire, Venmo, and online bill pay from your bank account.
- DO NOT INCLUDE payments made by credit card, debit card, PayPal, nor marketplaces such as Amazon, Upwork, Shopify, Teachable, etc because those merchant service providers themselves will be reporting to the IRS the payments to the vendor that flow through them.
- In general, you do not have to issue a form 1099 to a corporation. Exception: you must issue a 1099 for medical and law services provided to your business, whether or not the provider of the services is a corporation.
To gather information the payee needs to complete a Form W-9 for you. Going forward, it is advisable to have them complete their W-9 prior to the first payment to them. Form W-9 can be found online. Please provide our office with copies of all completed W9s.
CONSULT YOUR EMPLOYMENT ATTORNEY REGARDING CLASSIFICATION OF INDEPENDENT CONTRACTORS
For classifying workers as independent contractors under AB 5, most independent contractors are considered employees unless a three-factor ABC test is satisfied. This rule took effect January 1, 2020.
All three conditions of ABC test must be met in order to treat a worker as an independent contractor:
- The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact.
- The worker performs work that is outside the usual course of the hiring entity's business.
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
The state has launched a new website to help you understand the ABC test, AB 5, and your obligations as an employer. Please visit https://www.labor.ca.gov/employmentstatus/ which contains information from various state entities.
We are not responsible for misclassifying workers.
If you want us to file these forms for you, contact your staff person in our office.