1099 Reminder for Employers and Employees
By: Mick, December 21st, 2006
I’ve been filing 1099s for our sub-contractors since 1998 and I inevitably wait until the last minute to get them out. Typically, 1099s are due to contractors by the end of January in order to allow them time to have them submitted with their personal income taxes by April 15. Fortunately, QuickBooks makes the process as painless as possible and it’s just a matter of making sure I have the forms around to print. Employers can download the necessary forms from the IRS if they don’t already have them. Currently, the minimum earnings amount to require a 1099 for a sub-contractor is $600.
For employees, 1099 income is often overlooked when gathering tax documentation and can come back to haunt you if you’re not careful. Employees that hold down multiple jobs or work part-time often have 1099 income and they do not account for it when compiling their tax documentation. This can result in underpaying your income taxes. And although underpaying your taxes sounds good at first, trust me, it’s not. If they don’t find you now, they will later and likely at the worst possible time.
So get your 1099s in order and enjoy your holiday accounting.
Tags: 1099, irs, personal income taxes, work part time
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January 24th, 2007 at 4:00 pm
I’m doing 1099 forms for the first time. Are health insurance premiums paid to a provider of employees’ health insurance subject to 1099-Misc reporting? It was done in previous years…but I’m reading the manual to be payments for care, not insurance.
Any help?
January 26th, 2007 at 3:35 pm
Hi Cherie - I can’t be certain, as Mick has always handled 1099s for our companies. Also, I don’t believe we’ve ever been in that situation - none of our 1099 employees/contractors received health care or insurance assistance. I’ll ask Mick about this and find out if he knows, or if there are any resources online that he’d recommend for specific 1099 questions.
January 26th, 2007 at 5:13 pm
Cherie - Unfortunately, I’ve never faced that situation, so I have no idea about how that should be handled. If it were me, I would call our accountant, but you may have “some” luck investigating http://www.irs.gov.
February 25th, 2008 at 12:29 pm
Hello, I receive a 1099 for self-employment on a side job. I’m wondering if I can pay my wife 599 for the work she does at my home office (filing, dusting, etc) And then declare that as an expense. She would then not have to declare that since it would be below the minimum 1099 amount. Essentially setting aside 600 from taxes?
February 25th, 2008 at 12:47 pm
Hi Ben,
Unfortunately, I’m not qualified to give any kind of tax advice. I always ask our accountant when these types of issues arise. If you are incorporated, it would seem that your plan makes sense, at least to me. I would ask an accountant and go from there.
Thanks for the comment!