MAIN STREET TAX & ACCOUNTING SERVICES, INC.
212 Main Street, P.O. Box 219
Bernville, PA 19506
(610) 488-0295
FAX (610) 488-6693
Email:
IMPORTANT - FORM 1099 FILING PROCEDURES
THE PENALTY FOR NOT FILING 1099 FORMS INCREASED IN 2016 TO $260.00 PER FORM.
We feel it is necessary to go over the purpose and consequences of paying for rent and services rendered in your business or income-producing activity:
1. When you pay someone for services or pay rent over $600.00 in a calendar year, you are required to issue a Form 1099-MISC form. If you would like us to complete these forms, we will need your information by January 12, 2018.
2. Before any money is paid to the recipient, a W-9 Form must be completed by the recipient and provided to the payer. The Internal Revenue Service now wants to see both the 1099-MISC form you filed to the supplier/vendor and the W-9 Form they gave you. This is the payer’s responsibility to provide you the completed W-9 Form.
3. If step #2 is not done prior to paying any money to the recipient, you will be required to withhold 28% backup withholding from the money owed to the recipient. Should you not get a W-9 Form or withhold that 28%, the Internal Revenue Service will require you to pay the 28% whether it was withheld or not, and you will receive a penalty for not obtaining the W-9 Form prior to payment.
4. Please be advised that if we are completing your 1099-MISC, you must supply us with all completed W-9 Forms BY January 12, 2018. It is just as important to have a completed W-9 Form for someone to whom you paid money as it is to have a W-9 Form to prove no 1099 was required.
To avoid unnecessary hours gathering a significant amount of W-9 Forms for our clients this year and to avoid the potential exposure to penalties and backup withholding that you may be subject to, we advise you to please be sure that we get all of your information before our deadline date of January 12, 2018. If you have any questions about these procedures, please contact our office as it is our duty to protect you.
Please keep in mind the following types of payments are exempt from 1099 reporting requirements, and consequently, they do NOT need to be listed for us:
· Payments to corporations (including banks/lending institutions)
· Payments for goods, materials, and supplies (in contrast to services, rents, interest, etc.)
· Payments to one payee less than $600.00 total for 2017 (except certain interest and dividends payments, and royalty payments, which have a minimum of $10.00.)
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IMPORTANT - FORM 1099 FILING PROCEDURES
The following list is a partial listing of services that might require receiving a Form 1099:
· Legal and accounting services
· Rent of buildings, land equipment
· Interest and dividends of $10.00 or more
· Commissions (non-employees, rental collections fees, management fees)
· Subcontractor costs (plumbing, electrical, remodeling, masonry, etc. - all construction related subcontractors)
· Services for building or equipment maintenance or repair (i.e., painting, repair to business vehicle, garage rent, etc.)
· Machine hire
· Feed mixing
· Veterinarian fees
· Other non-employee services (i.e., lawn work)
· Prizes and awards
· Sale or exchange of one to four family unit real estate
Real Estate Reporting Requirements Form
Form 1099-S is to be used to report real estate transactions. Usually the person responsible for filing the 1099-S is the settlement agent who closes the transaction. If no one is filing, you may be the one responsible. If you have any questions about this requirement, please call us.
Worksheet due January 12, 2018
Please return the enclosed worksheet to us on or before January 12, 2018. We cannot guarantee the 1099 deadline of January 31, 2018, if we receive the information after January 12, 2018. The column noted “Kind of Payment” please indicate services, rental, interest income, etc.
If you have additional questions, please contact us, we will be more than happy to assist you.
Thank you!
Your Friends at Main Street Tax & Accounting Services, Inc.