When is it your job to send out 1099 tax forms?

CBS Report

January 16, 2019

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When is it your job to send out 1099 tax forms?

By Ray Martin

Updated on: January 16, 2019 / 9:00 AM / MoneyWatch

Tax refunds may be delayed due to shutdown

If you've earned interest on a bank account or money market fund, or received dividends from stocks or mutual funds, the bank or brokerage firm that holds your money must send you a form 1099-INT (for interest income), 1099-DIV (for dividend income) or 1099-B (for proceeds from the sale of investments). If all goes as planned, you should receive your 1099 by early February because banks and other financial firms must mail them by Jan. 31 or make them available to you electronically (if that's your preference) by Feb. 1.

But those aren't the only kinds of 1099 forms. There's also the 1099-MISC. If you're among the millions of taxpayers who owns a business or is self-employed, and you've made payments for the services you need to run your business, you may be required to send out a 1099-MISC. If you're in that group, it's important to know the rules and requirements for sending 1099 forms.

The IRS makes this a requirement so that you remind those you've paid for services to include those payments on their tax returns. Additionally, you're required to file with the IRS a copy of any 1099-MISC forms that you send out.

Here's what you need to know:

Here are a few additional requirements to keep in mind:

The information you must include on the 1099 includes the recipient's name, address, tax ID number (or SSN) and the amount of the payment. Because of this, most businesses require a completed W-9 form from any vendor or contractor they expect to pay more than $600 before the payment is made.

The IRS deadline for mailing 1099 forms for 2018 payments is Jan. 31. You don't want to overlook this requirement. If you fail to issue a required 1099, the IRS can assess penalties. For individuals, they can range from $30 to $100 per form. For businesses, it's a penalty of up to $250 per form, with a maximum total of $1.5 million.

Finally, you don't have to send 1099s for personal payments unrelated to your trade or business, such as to your landscaper, house painter, babysitter and so on.

First published on January 16, 2019

Ray Martin

View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.