Taxable Talk

The deadline for mailing 1099s to recipients is this coming Friday, January 31st. That’s a postmark deadline. If you mail a 1099 on Friday and it takes two weeks to get to the recipient, that’s not a problem. (Well, it is a problem for the postal service, but not the sender.)

One of my clients sent a Form W-9 to an individual; that individual received $1,300 from my client so a 1099-MISC needs to be sent. The individual responded, “It’s not much money–it’s only $1,300. Can’t you just skip sending the 1099?” As I told my client, the answer should be no.

A few years ago the IRS wised up and added questions on business forms, such as Schedule C:

You now have to answer a question whether or not you made any payments in 2013 that would require you to file a 1099 (Question I); Question J asks, “If ‘Yes,’ did you or will you file required Forms 1099?” It’s pretty obvious that my client needs to check the “yes” box to Question I. Checking “no” on Question J after checking “yes” on Question I is an excellent way of asking the IRS, “Can you please audit me?”

I suspect the recipient would prefer that $1,300 be under-the-table. My client and I agree that we’re going to obey the law and issue the 1099. (He did receive the completed Form W-9.) As a reminder, if someone refuses to complete a Form W-9 you must begin backup withholding. I also suspect that reminding the recipient of that detail influenced his decision to complete the Form W-9.

Tags: 1099s, W-9

This entry was posted on Sunday, January 26th, 2014 at 7:10 pm and is filed under IRS. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.