Income that falls under 1099 status, must be reported to the Internal Revenue Service and taxes must be paid on the income. While some taxpayers like to file their returns as soon as the new year arrives, those who must send out the 1099s have until February 15 to get them to recipients. Penalties are provided for those who send them out late.
Who Gets Them
According to IRS.gov, several situations call for a 1099. Examples of those who should receive 1099s include contract workers, such as freelance writers, landlords with rental income and people with income from investment portfolios. At the time of publication, the threshold for those who must receive 1099s was payments of $600 or more in any given year. For example, doing $650 worth of work for one company and $700 for another, would garner two 1099s at the end of the year.
Last Known Address
Form 1099s are sent to whatever address the targeted recipient provided. Providers of 1099s do not have to try and track down the new address of those who will receive the 1099s in the mail, which makes it important for recipients to notify 1099 providers if they move between the time they incurred the income and the February 15th deadline for getting them to the recipients.
Mailing Late
Penalties for not getting them out in time include fines up to $50 for each involved return. If the services of two contract workers were used, and neither of their 1099s went into the mail until after the deadline, the fine could be as high as $100 total. No maximum fine limit exists, therefore, a large company using many contract workers, or a large investment firm that fails to send the forms out to their thousands of investment clients, could incur sizable fines.
Fine Increases
Sending the 1099 30 days late incurs a $15 fine. Getting it in the mail by August 31 holds the fee at $30, but if you wait until after August 1, you can expect to pay a $50 fee. In severe cases, or habitual cases, fines can be increased.
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