Category: Timely Opportunities
If a trade or business pays $600 or more a year for services to any individual, partnership or LLC, Form 1099‐NEC must be sent to recipients and filed with the IRS by January 31st of each year. For rental properties these common services may include: cleaning and maintenance, commissions, professional fees, management fees, repairs, etc. (Payments made via a credit card are reportable by the credit card company, and do not require additional reporting on Forms 1099-NEC.) If legal services were paid anyone by the trade or business in the amount of $600 or more, Form 1099-MISC must be filed.
To properly file Form 1099‐NEC, each service provider must provide a signed Form W‐9 to the trade or business. We suggest obtaining this Form W-9 from every service provider before making payment to that provider as it may be difficult to obtain after payment has been made. Your Kerkering Barberio tax adviser can assist you with preparing Forms 1099-NEC and will need all information by January 15th to prepare the forms by the filing due date. A blank Form W-9 is available at: https://www.irs.gov/pub/irs-pdf/fw9.pdf.
There are a couple of questions on income tax returns asking if all required Forms 1099 were filed. There are penalties for failure to file these forms timely. The IRS may also hold you responsible for not withholding 24% on the amount paid and disallow a deduction for the payments made.