The January 31 Deadline is coming up very soon. Missing your deadline could result in penalties from the IRS. If you haven’t filed yet, don’t just accept the penalty! You can still meet your deadline and avoid being penalized by the IRS.
Potential IRS Penalties
You may know that a late form will cost you, but are you aware of the other reasons you may be penalized? These actions will result in a form of penalty from the IRS
Failing to file by the deadline
Failing to include all information required on 1099 Forms
Filing with incorrect information
Filing with paper forms when you were required to e-file
Reporting an incorrect TIN
Not providing a TIN
Sloppy or unreadable forms
Failing to include a 1096 Form (only applicable to paper filers)
How Much Will These Penalties Cost Me?
Unfortunately, these penalties are not the kind you can just take the loss on. Even if you file a few days after the deadline you will be charged for each late form. This can add up very quickly.
If you file within thirty days after the deadline passes, you will be charged about $50 per return. This can reach up to $187,500, or $536,000 for larger businesses.
If you file in the time period between 31 days after the deadline and August 1, the penalty will double to $100 per form. This can reach up to $536,000 or $1,609,000 for larger businesses.
When you file your 1099-MISC later than August 1, the penalties are going to be even higher. You will be charged about $260 per return, maxing out at $1,072,500 or $3,218,500 for larger businesses.
If you never submit Form 1099-MISC you will be charged around $530 per return. If you have multiple forms, this can result in a huge fine for you, especially because there is no maximum penalty for this.
What can I do to avoid penalties?
No one wants to pay penalty fees for anything. As you now know, you’ll be penalized for late or incorrect returns. Therefore, it is important to file your return with correct information and by the due date. To ensure your filing goes smoothly, take these precautions
Gather all needed information before you begin filing, including
Business information such as EIN, SSN, business name, and address
Recipient information such as EIN, SSN, business name, and address
Amounts paid to recipients
Federal income tax withheld
State and local information such as state number and taxes withheld
Make sure you determine what you are required to file
You are required to send a copy to the IRS as well as the recipient
If you choose to file by paper, you’ll need to include transmittal Form 1096
Make sure you are filing the right 1099 form. You can learn about the different variants of 1099 here
File Your 1099s with TaxBandits
TaxBandits understands that filing tax returns is no walk in the park. However, our simplified e-filing process allows for quick, easy filing. Our IRS Business Rule Validations ensure error-free filing for our clients.
Regardless of how familiar you are with 1099s, e-filing with TaxBandits is the best choice for you. We can also handle all of your print and postal mailings when it comes to recipient copies. Get started now at TaxBandits.com!