The IRS has moved the deadline for filing 1099Miscs to January 31st this year (previously February 15th). Every time you (as a small business) pay a subcontractor $600.00 or more, you are required to report these payments to the IRS. In order to report these payments you must have the subcontactor’s W9 form on file. This practice not only makes the filing of the 1099’s smoother, but this also lets you know if the subcontractor is exempt from back up withholding, or if you will be required to withhold income tax from checks issued to the independent contractors at a flat rate of 28% and send it to the IRS.
You may have recently received a notice from the Treasury Department (Notice CP-2100A) stating that a 1099 that was filed in 2015 by your business indicating an incorrect name or ITIN. Read the notice carefully: You may not need to respond to this notice, but you do need to follow up with the recipient to verify that you have the correct information on file.
If you have any questions, we are always happy to help!