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Taxes

Do I fill out/send 1099s or do my clients?

Your clients should complete and send you all of their 1099s for the year by the end of January. However, if they do not you are still responsible for reporting your income to the IRS!


The IRS requires Sole Proprietors and other business owners to report their payments incurred as part of their regular and normal business activities.Taxpayers must send these forms to the IRS and to the recipients by federal filing dates.


The IRS requires sole proprietors to send their forms to their payees by Jan. 31. They must also file their forms with the IRS by Feb. 28. It is important to know that the IRS imposes late filing penalties against taxpayers who fail to file their forms by the mandatory filing deadlines.


It is important to also note the following:


Taxpayers are not required to report payments of $600 or more for rent, brokers or agents.


Taxpayers do not have to report their income of $600 or more incurred for business equipment, merchandise or storage.


Taxpayers are not required to report wages they paid to their employees, because they must use W-2 forms to report their employment wage payments.


The IRS also does not require taxpayers to report compensation paid to corporations, unless those corporations are corporate law firms.


Sole proprietors must send Form 1099-MISC to their attorneys if they paid any one attorney or law firm $600 or more during the tax year.



Reference: What is a 1099 Form


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