1099-MISC Filing Changes for 2011 Tax Year

The IRS issued new reporting regulations for tax year 2011 1099-MISC form. These regulations will exclude some forms of payments from the 1099-MISC form; instead, the payments will be reported on the new third party form 1099-K.

If you have made payments to vendors in tax year 2011 using only cash or checks, this one does NOT apply to you. If, however, you used other forms of payment (credit/debit cards and third-party payment services like PayPal), you will need to report certain types of transactions and exclude others.  Only cash and check payments to vendors requiring a 1099 will need to be included on the 1099-MISC that you send.  The credit card companies and other payment processors like PayPal will be required to send the other amounts to your vendor on a 1099-K. 

The most common types of payments required to be reported on a 1099 are for rents and services. These are required to be reported to any unincorporated recipient who is paid at least $600 during the calendar year.   This has not changed. 

Intuit® is aware of these compliance changes and has updated the 1099 Wizard in QuickBooks® for Windows 2012 and QuickBooks for Mac 2012 to include payment exclusion features to comply with the 1099-MISC regulation changes. In addition, Intuit has developed other solutions for customers on prior year, supported versions of QuickBooks. This includes the availability of the QuickBooks 1099 Assistant, a downloadable application designed specifically for QuickBooks 2009-2011 Windows and QuickBooks 2010 – 2011 Mac customers. You can get the QuickBooks 1099 Assistant for Windows here and for Mac here.

If you are personally in a trade or business that is reported on a Schedule C (Profit or Loss From Business) or Schedule F (Profit or Loss From Farming) on your individual tax return, you will notice that you will be required to answer two new questions: 

(1) Did you make any payments in 2011 that would require you to file Form(s) 1099?

(2) If “yes,” did you or will you file all required Forms 1099?

You are required to provide the recipients a 1099 on or before January 31, 2012. If you file the 1099s electronically to the IRS, they are due on or before April 2, 2012. 

Let me know if I can help in producing your 1099's.  Please discuss any IRS requirements that you are unsure of with your accountant. 

The information in this post was adapted from an article written by Jennifer Roop and from a newsletter produce by the accounting firm of  Carr, Riggs & Ingram.