Posted by CF on 1/7/08 7:03pm
Msg #229357
Tax Question
I have searched the irs.gov website and could not find any details. I am trying to find out if there is a deadline to receive your 1099's from companies. I think that it is mandatory to receive a W-2 from employers by January 31- each year. I wonder if this applies to 1099's too? Anyone know this answer? I am asking b/c of all the issues that has happened this year- what if I file my taxes and then I receive more 1099's? I know that for the companies that have been slow pay- are they going to be slow to 1099 their notaries? Doing it whenever they feel like it? I know what companies I should be receiving them from....but with working with so many companies- some may get overlooked. Just curious how others have handled this in the past. TIA!!!!!
| Reply by Sylvia_FL on 1/7/08 7:10pm
Msg #229358
I always send out 1099's by the end of January.
But whether you get a 1099 or not you have to report all your income.
I only send out 1099's when a signing agent has received $600 or more from me during the year, but I report all fees I pay out.
Also in 2006 I received a memo from a title company regarding IRS 1099 Reporting Amendments saying they only have to send out 1099's on fees paid out of their operating account and not their escrow account.
I use Quickbooks and it keeps track of everything. So, if I didn't get a 1099 from a company I stll have a record of what fees I received from them.
| Reply by Glenn Strickler on 1/7/08 7:33pm
Msg #229367
January 31st, But I don't think anyone a
I report my income by what my records say as I work for many companies that don't send me a 1099 because I did not earn $600 from them, but it still needs to be reported. In some cases, I don't receive a 1099 from a company or two that did pay me more than $600 for the year.
I report income by my records and save any 1099's I do get in my records in case the IRS decides to audit me. Some 1099's come in after I file ...... Long after ....
| Reply by Glenn Strickler on 1/7/08 7:34pm
Msg #229368
I hate when I push the wrong key ..... n/m
| Reply by CF on 1/7/08 8:00pm
Msg #229374
Thanks for the information! I just think that if I forget a company that has only given me 4 or 5 jobs- then getting the 1099 is a back up to my reporting. I guess that I can always ammend my taxes if I need to.
| Reply by LisaWI on 1/8/08 6:14am
Msg #229438
Sylvia and Glenn are correct. You could wait for awhile before you get all 1099's and then not receive all of them anyway. Your best bet is to keep your own records of some sort, a spreadsheet for income, add all check stubs, etc.
I did call the IRS about this in my first year in business because I am ready with my taxes by the middle of January. I know exactly what I made in the year and was wondering if by law I had to wait for the 1099's to send in with my taxes. They said no, but heres the deal, you have to be right on your income that you state on your taxes without the 1099's. And the income you state on your taxes without the 1099's has to be over what the 1099's would state. Or the exact amount, which would be rare because not all comps will send a 1099. The point is if the income you state without your 1099's is lower than the 1099's that comps send in to the IRS, they are going to question that you did not report all your income. And there is also the rare possibility that a comp or two sends 1099's with wrong amounts which would also change what you put for your income. I dont believe that happens too often, but it could.
PS: There are alot of comps that dont send 1099's. That has been my personal experience anyway.
They do strongly suggest that you wait for your 1099's. But it is not law you have to wait to send them in.
Disclaimer: I am not a tax accountant, just relaying what the IRS had told me in reference to this subject. Use info at your own risk
| Reply by WDMD on 1/8/08 7:23am
Msg #229442
"They said no, but heres the deal, you have to be right on your income that you state on your taxes without the 1099's. And the income you state on your taxes without the 1099's has to be over what the 1099's would state. Or the exact amount, which would be rare because not all comps will send a 1099. The point is if the income you state without your 1099's is lower than the 1099's that comps send in to the IRS, they are going to question that you did not report all your income. And there is also the rare possibility that a comp or two sends 1099's with wrong amounts which would also change what you put for your income. I dont believe that happens too often, but it could."
I have never based my gross income on 1099's I receive. Between the companies who do not send out 1099's, and the companies who work on the accrual system (considering you paid before they actually pay you), and the companies who out and out lie about what you received, my tax return never matches the 1099's. To get an accurate accounting of what you received during the year you really should keep track of what you received yourself and not rely on 1099's. If you keep accurate records you have nothing to worry about. 1099's do not get sent with the return (unless you had taxes witheld), so you should not have to wait to receive them.
| Reply by sue_pa on 1/8/08 7:41am
Msg #229446
Every year we go through this. Your taxes are paid on what you 'earned', not what someone 'paid' you. Cash basis scenario. Companies write checks on December 31 because they need the deduction for 2007. Notaries naturally don't receive the checks until January ??, 2008. For the company's books, it's a 2007 entry. For the notary it's 2008.
| Reply by WDMD on 1/8/08 7:47am
Msg #229448
" Your taxes are paid on what you 'earned', not what someone 'paid' you. Cash basis scenario. Companies write checks on December 31 because they need the deduction for 2007. Notaries naturally don't receive the checks until January ??, 2008. For the company's books, it's a 2007 entry. For the notary it's 2008."
And thats what I said about companies that use the accrual system of accounting.
| Reply by Sharon Taylor on 1/8/08 7:57am
Msg #229450
I wait for the 1099s and compare with my records
The biggest reconciliation has to be when you did the job in one year but the payment arrived in the next year. Your records will show that you "earned" it in 2006, for example, but the company wrote the check and sent it to you in 2007. What the company reports to the IRS is the amount they paid you in 2007, and that's what is on the 1099 and what you need to report to the IRS.
Say you had 5 assignments in 2005 for ABC, they paid you for 4 of those in 2005 and 1 in 2006; you did 7 assignments for ABC in 2006, and they paid you for 5 of them in 2006 and the other 2 in 2007; you did 3 assignments for ABC in 2007, and they only paid you for 1 in 2007.
Your records will show that you earned XXX for 5 assigments in 2005, XXX for 7 assigments in 2006, and XXX for 3 assigments in 2007.
BUT the ABC 1099s will show they paid you XXX for 4 assigments in 2005, XXX for 6 assigments in 2006 (1 from 2005 and 5 from 2006 work), and XXX for 3 assignments in 2007 (2 from 2006 and 1 from 2007).
Totally different figures, and the one that the IRS expects to see on your tax return is the amount on the 1099s for payments actually issued by them during the year.
And you have to watch for the ones where they date the check for late in December but either don't mail it or you don't receive it until January. That happens quite a bit when companies are trying to maximize their expense deductions for the year but don't want to actually have the money leave their bank account until the following year. A check could be dated December 30, 2007, for example, making it part of the company's 2007 deductible expenses, but you don't receive it until January 15, 2008, making it part of your 2008 income on your records...but it's going to show up as a 2007 payment on the 2007 1099 from the company.
That's why I always wait for the 1099s even though it means I don't send out our tax return until usually around the end of February. Even though companies do have until the end of January to send any required 1099s, some of them are always late in either preparing or mailing them.
| Reply by WDMD on 1/8/08 8:14am
Msg #229452
Re: I wait for the 1099s and compare with my records
"Totally different figures, and the one that the IRS expects to see on your tax return is the amount on the 1099s for payments actually issued by them during the year."
Not true. The IRS expects to see an accurate tax return. If you are a cash basis tax payer and report the actual income you received during the year, then you have met your requirements. If you have the records to back up any differences then you have nothing to worry about. just because your return does not match the 1099's you receive does not mean you will get a letter from the IRS. The IRS is well aware of the many reasons your return could possibly not match the 1099's you receive.
| Reply by CF on 1/8/08 8:24am
Msg #229453
Thanks for the input!!!!
I have an accurate system of accounting for my business. I have been doing this for 4 years. I rely on getting the 1099's to compare my records too and then proceed from there. I was just tyring to determine if there was a "deadline to receive a 1099" that way I could continue the way that I have prepared my taxes for the past 4 years. (knock on wood-no audits yet!!!!) Thanks for all the advice!!!!
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