Form 1099 is a little-mentioned but extremely important tax obligation for companies that hire service providers in the United States. Issued by the US Internal Revenue Service (IRS ), it must be submitted whenever you make payments to certain types of contractors, whether individuals or companies, who are US tax residents.
Do I Only Have to Fill in Form 1099 for Individuals?
No. The form applies to both individuals and companies, as long as they are U.S. taxpayers and meet the required criteria.
When Should I Issue the 1099?
You should fill in and send in the 1099 if:
– You paid US$600 or more during the year to a service provider;
– The payments were made by bank transfer, check or cash.
⚠️ ️ Please note: Payments made by credit card or digital platforms (PayPal, Stripe, Venmo, etc.) do not need to be reported by you directly, as these providers must issue the appropriate form (usually the 1099-K).
What Is the Filing Deadline?
Form 1099 is an annual obligation and must be filed by January 31 of the year following the payments made.
What Happens if I Don’t File or File Late?
Failure to file or filing Form 1099 late can result in significant fines from the IRS, which vary depending on the length of the delay and the number of forms not filed. In addition, non-compliance can lead to tax complications for your company.
How Do I Fill in Form 1099?
If you’re a client of Globalfy‘s Scale (Bookkeeping) plan, there’s no need to worry: we’ll take care of the whole process for your company.
If you are not yet a Scale client, please contact us so that we can advise you more effectively.
