As you recover from the holidays and New Years, you probably are going through a bit of a lull. Well, it is time to wake up because a few key tax deadlines are quickly approaching.
The 1099 Deadline Approaches
When most people think of taxes, they think of April 15th as the magic day of misery. Alas, the tax system in the United States is unique. It is designed to force you to report on your fellow citizens. In this case, we are talking about the 1099-MISC form.
The 1099-MISC form is a beauty. It requires you to report certain payments you made during the year to other parties. By doing so, the IRS has a record of what was paid to whom. To rub it in, the IRS also requires you to send a copy to that person so they know you reported the money. Imagine that!
In general terms, you have to prepare and file a 1099-MISC for payments you made to an independent contractor in 2006. Generally, you only have to do this for payments that totaled more than $600. Since we are talking taxes, there are plenty of exceptions to this general rule, so you need to go ahead and read the directions on the form. I realize this will be difficult for my fellow males, buy you can always ask a female friend to do it for you!
Once you have the 1099 filled out, you need to file it with the IRS and send a copy off to the party you have listed on the form. Ironically, you send off the copy to the offended party first with the deadline being January 31, 2006. The filing with the IRS is then due later in February. This approach apparently is designed to give you and the aggrieved party you are reporting plenty of time to argue over the 1099.
Snide remarks aside, you need to get hopping on your 1099 filings. The due date is quickly approaching, so you need to find the forms. While they are easy to use, you cannot just print them off the web. The forms are scanned by the computers at the IRS, so you need to get “scannable” forms. The IRS typically sends you one form [thanks a lot], but you can find more at the post office and larger public libraries. Make sure to call first to avoid driving around town all day.
Richard A. Chapo is with BusinessTaxRecovery.com - providing on
tax tips.
