Preparing and filing 1099 forms is a year-end activity that requires special attention to the details, especially for K-12 districts.
Here are a few tips that can help your organization ensure accuracy and timeliness with its 2019 Form 1099 preparation and reporting.
Identify All Qualifying Vendors
Your district will need to create a Form 1099-MISC, Miscellaneous Income, per the IRS, for each person to whom you have paid:
- At least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate
- Gross proceeds of $600 or more paid to an attorney
Review All 1099 Payment Records
Review records for all 1099 payments made for the year to ensure you have accounted for all non-employee compensation payments. It’s important to obtain all 1099 payment information from individual schools (e.g., referees, umpires, etc.). While one school may have only paid an individual $100, other schools may have paid this same individual as well. If the individual were paid $600 or more throughout the entire district, they would need to receive a 1099-M.
Balance 1099s Before Filing
It’s important to balance 1099s by accounting for ALL non-employee compensation paid and validating the resulting value against the annual returns before filing with the IRS.
Understand Required Filing
You will need to create at least three sets of 1099-M forms – one for Federal filing (Red Copy A), one for recipient filing (Copy B) and one for recipient copy (Copy 2). Electronic filing is required if 250 or more returns are being filed. Click here to learn more about filing electronically:
https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire
When you are ready to file electronically:
- Go to https://fire.irs.gov
- Sign on to website
- Upload 1099 file
NOTE: If using the paper filing option (less than 250 forms), be sure to include Form 1026.
File on Time
Late filing of 1099s could lead to penalties. The longer you wait to file, the larger the penalty your organization will incur. It pays to keep to these deadlines:
2019 Filing Deadlines
- Report to Recipient: January 31, 2020
- Report to IRS: January 31, 2020
