Now that we’re in 2006, it’s time for me to go back to work. First on the agenda will be business information returns/filings, such as W-2s and 1099s. These forms must be distributed by January 31st, but do not have to be sent in to the government until February 28th (if you file the forms electronically, March 31st).
The most common form 1099 sent is the 1099-MISC. This form covers non-employee compensation, rents, payments to attorneys, and royalties. In general, a 1099-MISC must be issued if the payments during 2005 total $600 or more ($10 or more for royalties). Most payments to corporations are exempt from reporting on a 1099.
If you’re in California, you must also report this information to the Franchise Tax Board (FTB). If you file using paper returns to the IRS, the IRS will forward the filings to the FTB and you need not file directly with the FTB. However, if you file electronically, you must also file electronically with the FTB. California has stringent penalties regarding non-filings of information returns (far stricter than the federal penalties). We encourage all of our California clients to require that before any payments are made to a supplier/vendor that a W-9 be obtained.
If you’re one of our clients and want us to prepare your 1099s, please contact our office when you’re ready.
Tags: 1099s