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Santa’s 1099s

It’s that time of year again. Sweaters zipped up, logs on the fire, shoppers in the stores and your list of things to do to get ready for tax season.

Hopefully, you’ve had a great year. Sometimes, that means you needed a bit more help. Even Santa needed an extra hand preparing the gifts the elves couldn’t get finished. If you hired contractors, consultants or others, you may be wondering to whom you must issue 1099s.

Here are the criteria:

  • Anyone who is paid more than $600 is the typical answer, but it’s not the only stipulation.
  • 1099’s are cash basis – it is based on payments made, not bills received
  • If people are paid exactly $600, they must be issued a 1099. If they are paid $599.99, then they do NOT need a 1099.
  • If the total of all payments for 2014 is $600 or greater, you must issue a 1099. For example, if payment 1 in March is $200, payment 2 in September is $350 and payment 3 in December is $150, the total is $700 and the vendor must be issued at 1099.
  • If the payee is incorporated – their business name ends with has an “inc” – then the payee DOES NOT need to be issued a 1099:
    • For instance, you do not need to issue 1099s to Verizon or AT&T because they are incorporated.
    • Fourlane is incorporated, so you do not need to issue us a 1099.
    • If the taxpayer is a corporation and pays non-corporations (such as independent contractors), then you MUST issue them 1099s.
  • Lawyers must be issued 1099s, no matter how much they were paid for legal services. It does not matter if they are a corporation or if they are under the $600 threshold.

Failure to file by Jan. 31, 2015 could lead to IRS penalties.

Fourlane is happy to help you identify which vendors you need to submit 1099s to, based on your QuickBooks file, and e-File them on your behalf. We can also help you obtain W9s from vendors.

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About Marjorie Adams

Our head QuickBooks trainer and guru, Marjorie Adams, is Founder and CEO of Fourlane, Inc., an award-winning consulting firm and Intuit’s #1 QuickBooks Reseller Partner. Fourlane’s team of experts offers several QuickBooks oriented services including consulting, training, programming, integration, and more. Over the years, Fourlane has helped over 10,000 customers across many different industries with their QuickBooks accounting software. Marjorie Adams is considered one of the top QuickBooks trainers in the country. She was listed on CPA Practice Advisor’s 40 Under 40 in 2014 & 2015, and has been recognized as Intuitive Accountant’s 2015 QuickBooks Desktop ProAdvisor of the Year. Marjorie sits on Intuit’s VIP Program, is a frequent contributor to Inuit Accountants News Central, and has developed Intuit’s QuickBooks Enterprise Certification training. She has also been published in The Wall Street Journal, Forbes, BusinessWeek, American Express Open, the Huffington Post, and Inc. Magazine.

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