New 1099 Rules
The IRS requires that business owners file a Form 1099-Misc by January 31, 2017 for every individual or non-corporate LLC that you paid over $600 in 2016 for trade or business services. If you pay a lawyer corporation for trade or business services they must also receive the form. Failure to file the form for 2016 could result in a penalty that could be as much as $1,000 per each omitted, late or incorrect 1099-Misc. The 1099-Misc must be provided to the taxpayer by January 31, 2017 and this year the IRS’ copy must also be provided by January 31, 2017 or those penalties will apply. The problem you may encounter is those sub-contractors that don’t want you to issue them one, so make sure you get them to fill out a W-9 form before you issue them a payment.
In order to timely file your 2016 Forms 1099-Misc in agreement with this letter you must provide us, IN WRITING, a complete list of payees by January 23, 2017 as follows, for each payee:
Payee City, State, Zip
Payee Federal ID Number (obtained by you on Form W-9)
Amount paid during 2016 for non-employee compensation
Amount paid in 2016 for Rent
If you are in doubt whether to issue a 1099, the safest treatment is to issue the form.