What Are The Penalties For Not Filing A 1099?

REVISED FORM 1099 PENALTIES

If, in the normal course of your business, you make certain payments, you may be required to file a     Form 1099 - Information Return.  The most common, but not the only, type of reportable payments for small businesses would be payments to Independent Contractors in excess of $600 during the calendar year.

 

Associated Penalties attaching to Form 1099 have changed drastically as a result of new law signed on June 29, 2015.  The following 1099 Penalties are effective with returns required to be FILED after December 31, 2015, thereby affecting calendar years 2015 and later.

 

FOR NOT FILING CORRECT INFORMATION RETURNS

 

The penalty for not filing correct information returns increases.  The penalty is now $250 PER RETURN up from $100 per return.  There are new, increased but lesser penalties if unintentional delinquencies are corrected within certain time constraints.

 

The penalty for intentional disregard is now $500 PER RETURN up from $250 per return.

 

FOR NOT FURNISHING INFORMATION RETURNS

 

The penalty for not furnishing information returns increases.  The penalty is now $250 PER RETURN  up from $100 per return.  There are new, increased but lesser penalties if unintentional delinquencies are corrected within certain time constraints.

 

The penalty for intentional disregard is now $500 PER RETURN up from $250 per return.

 

As can be seen these new penalty limits are severe and we strongly suggest that businesses ensure that they have a properly completed W-9 Form in advance of paying any items that may be reportable on Form 1099.

 

If you are unsure about the Form 1099 filing requirements, we invite you to call our office to discuss your particular situation.