1099, 1096 and W-9 Forms
Have you hired a sole proprietor to provide a service for your company?
Did you pay them $600 or more during 2011?
If you have answered “yes” to these two questions, you need to send a 1099 to them by January 31, 2012 as well as send a copy to the government agencies by the end of February. You need to obtain a completed W-9 form from the sole proprietor and keep it on file.
To stay in compliance with federal law, I suggest that for each service person or company your company does business with:
- Go to www.irs.gov for a PDF copy of the W-9 form.
- Keep a copy of the completed W-9 form on file.
- Mail out the W-9 form with new contact or the first time you pay any service provider. Ask them to complete the form and return back to you.
- They will need to complete the following sections: Name, business name, business classification, address, taxpayer identification number (TIN), signature, and date.
1099 forms are available at office supply stores. By January 31, 2012 you will need to complete and mail a 1099 form to the service provider who you have paid $600 or more in 2011. You will also need to mail copies of all the 1099 along with a 1096 cover form to the IRS and the WI Department of Revenue by the end of February, 2012.
*Penalties for not filing or late filing increase with time, ranging from $15 to $50 per form not filed or incorrectly filed. If you file an incorrect 1099 form, but correct it by August 1st the IRS will usually forgive the penalty. On the other hand, if the IRS can show “intentional disregard” of the filing requirements or the accuracy of the information, the minimum penalty is $100 per 1099 form.
Do you have bookkeeping questions? Evlyn Carlile can help. Contact her via email at firstname.lastname@example.org.