Did you know 1099 Tax Season is ahead? Yes, Form 1099 Tax season is going to begin for the tax period 2022-23. Get ready, you may receive those annoying tax forms in the mail by the end of January.
What do they remind you of? They might remind you what you have earned throughout the tax year apart from your regular salary. Besides, the contractors who earn 1099 income must report it on their tax returns. What happens if your 1099 form is get lost in the mail? Can you ask for another copy? Here is the detailed info what if Form 1099 is missing & why you shouldn’t ask for it.
Importance of Form 1099 Information Return
In general, for whatever you got paid throughout 2022, if it wasn’t waged then you will receive a 1099 Form. Because the IRS instructs every taxpayer to report the independent contractor income on the respective 1099. Each 1099 Tax Form matched with the contractor’s Social Security Number. This is to check whether the contractor is reporting the 1099 income on the tax return or not. With a 1099 Information Return, the IRS can easily spew out a tax bill. In case, if you fail to report it on the income tax return form, then it is 100% sure that you will be audited. Or at least you may receive a tax notice that is subjecting you to pay penalties or fines.
Why you shouldn’t ask for a 1099 Tax Return?
As we know, Form 1099 supposed to mailed out to the contractors by January 31st every year. Besides, employees need a W-2 Form to file the tax return form. But does a contractor need a 1099 Form to file the tax return? Generally, contractors don’t need a 1099 Form nor they don’t file a 1099 along with the tax return. So, if you don’t receive one that you are expecting, stop asking for it. Because most of the businesses file a 1099 Form when the payment made meets the reporting threshold. Hence, if you didn’t receive 1099, don’t ask for it. Besides, if it comes, don’t ignore it. Whether you receive a 1099 or not, it is better to include the income on your tax return.
Which 1099 Form you should ask for?
As per the IRS guidelines, you should ask for Form 1099 R if in case you didn’t receive it. You should consider asking it because every 1099 information return is important. As mentioned above, you audited, or else you may receive a tax notice from the IRS. Because the IRS audits for six years.
What if the businesses fail to file 1099 intentionally?
Apart from contractors audited, the businesses also get audited. Also, they may be subject to penalties. Yes, for the businesses who fail to file 1099 intentionally, the IRS imposes heavy and hefty penalties. Apart from regular penalties and interests, intentionally failing to file an information return is heavy and hefty. So, ensure whether payments made require a 1099 Form filing or not. If it is necessary, file Form 1099 within the due date.
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