This message is to remind you of two important upcoming tax deadlines:
January 15 is the deadline for the fourth and final estimated tax payment for 2014. Make sure your estimated payment is postmarked by the 15th. You might want to send it certified return receipt to be sure of when it arrives.
1099-MISC forms are due to contractors by January 31. They are due to the IRS by February 28 for paper filing or March 31 for electronic filing. For more information on who needs to receive a 1099-MISC please refer to this post.
I regularly get questions about whether or not to file 1099s. They are often surprised that more vendors and contractors need 1099s than they think. The list goes well beyond a freelancer you hire or a subcontractor you use.
In general, 1099s are required for payments over $600 made to individuals and partnerships – NOT corporations. The following is a list of common vendors you will need to issue 1099s for:
Payments for services
Payments for rent to landlords
Payments for prizes and awards
Payments to attorneys
The biggest exception to the general rules above is that a 1099 needs to be filed for attorneys and legal services even if they are a corporation.
Not sure if you should file a 1099? My theory is- if in doubt, file it. There is no problem if you file a 1099 you did not need to file. However, the IRS can hit you for up to $100 per 1099 you do not file if you needed to. Even worse, the IRS can disallow the corresponding deduction on your income tax return.