Am I Required to File IRS Form 1099 or Other Information Return?

Am I Required to File Form 1099 or Other Information Returns?
Here’s the short answer:
You are not required to file information return(s) including 1099’s if any of the following situations apply:

  • You are not engaged in a trade or business
  • You are engaged in a trade or business and the payment was made to another business that is incorporated, or the sum of all payments made to the person or unincorporated business is less than $600 in one tax year (unless the recipient is an attorney or law firm, see specific instructions for 1099-MISC for further details)

If You MUST File Form 1099’s, Here’s What You Need To Do:

  • Call Steve Mangione CPA your Orange County Accounting and Tax specialist.
  • We’ll answer your questions
  • We’ll print out the forms for you to mail to your vendors, (or we can mail)
  • We’ll e-file the Form 1096 Annual Summary and Transmittal of U.S. Information Returns to the IRS

What Is the Due Date for Mailing 1099’s to Vendors?

  • Form 1099-MISC is due to recipient on last day of January when you are reporting nonemployee compensation payments in box 7
  • Last day of February
  • File Form 1098 on paper by February 28, 2017, or March 31, 2017, if filing
    electronically through the FIRE system

NOTE: If the regular due date falls on a Saturday, Sunday, or legal holiday, file by the next business day.  A business day is any day that is not a Saturday, Sunday, or legal holiday.

If You Want To Create and Send Form 1099’s To Your Vendors and the Information Return Form 1096 To the IRS Yourself, Here’s What You Need To Do:

  1. Order the forms directly from the IRS for free. IRS Order Form
  2. Buy the forms from your local office supply store.  You’ll be able to print form on your inkjet or laser printer.  Some forms comes with free templates
    (TIP – Buy early they sell out early January)
  3. Request each vendor fill out IRS Form W-9
  4. Make sure you only include vendors that you paid over $600
  5. Certain vendors require you put the dollar amount in a different box and there are multiple 1099’s i.e. 1099-MISC | 1099-INT or the most common for trades and businesses
  6. You do not have to send a 1099 to corporations
  7. Fill out Form 1096 and mail to the IRS



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What Records Should I Keep to Support My Tax Return?

Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

How Long Should I Keep My Tax Records?

It is important to keep these documents because they support the entries in your books and on your tax return.

Gross receipts – Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents that show gross receipts include the following.

  • Cash register tapes.
  • Bank deposit slips.
  • Receipt books.
  • Invoices.
  • Credit card charge slips.
  • Forms 1099-MISC.

Inventory – Inventory is any item you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for inventory. Documents reporting the cost of inventory include the following.

  • Canceled checks.
  • Cash register tape receipts.
  • Credit card sales slips.
  • Invoices.

Expenses – Expenses are the costs you incur (other than the cost of inventory) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Documents for expenses include the following.

  • Canceled checks.
  • Cash register tapes.
  • Account statements.
  • Credit card sales slips.

How Do I Make an Accountant’s Copy in QuickBooks?

How to send the accountant’s copy of QuickBooks to your accountant:

  1. Go to the main screen of QuickBooks and click on <File>
  2. Go to Accountant’s Copy —-> Click <Send to accountant>  You will get a screen that confirms you want to send a file to your accountant
  3. Click <Next>
  4. Enter a date:  xx/xx/xxxx – QuickBooks is looking for something called the dividing date.  The dividing date separates what period is closed so your accountant can make changes, but you will not be able to make changes until you receive the changes from your accountant or remove the restrictions.
  5. Click <Next>
  6. Enter your accountant’s email address.
  7. Enter your name and your email address and then click <Next>
  8. QuickBooks is looking for a password. I would recommend calling or texting your accountant with the password.  Keep in mind the password must be at least 7 characters and both capital and non capital letters and at least one number.
  9. Write a quick note to your accountant i.e.  Here is the QuickBooks file for your review for the second quarter 2016.
  10. Click <Send>
  11. A pop up tells you that QuickBooks must close all your windows to create an accountant’s copy. Click <OK>.
  12. A message will appear that basically says that the accountant’s copy depending on how large may take up to 15 minutes to be sent to your accountant.

Watch video below: