It's that time of year again to determine who should receive a Form 1099 MISC. The IRS requires that you send a Form 1099 MISC to all individuals (not corporations) to whom you paid $600.00 or more for services, interest or rent. There is one exception to this. Any payments to a corporation for legal fees in excess of $600.00 are reportable on Form 1099-MISC. Sending proper 1099's is very important since the IRS will match 1099's to the individual income tax returns in order to determine whether or not all income was properly reported.
The penalty for not complying with the filing of Form 1099's ranges from $15.00 to $100.00 for each form not properly completed and timely filed.
Our past experience is that, if you income tax return is audited, one of the first items reviews is whether you submitted all of the necessary Form 1099's. This is an easy way for the IRS to raise revenues (by charging you a penalty) and force you to comply with the law.
For more information contact us or go to http://www.irs.gov/.
