(303) 499-7445 info@tandemcpas.com

Year-end Reminders

1099 Reporting

  1. New for 2023 – The IRS has opened a website where you can file these forms for free:
  1. 1099-NEC for Non-Employee Compensation Payments your business makes for services to individuals or businesses are required to be reported on 1099-NEC. This form is used to report payments to vendors such as to contractors, professional services (such as legal, accounting, advertising), cleaning companies, and others. This form is required to be provided to vendors and filed with the IRS no later than 1/31/24.
  1. Issue a 1099-NEC to Tandem CPAs – Unless all payments made to Tandem in 2023 were made by credit card, we are a vendor subject to 1099 reporting. Tandem’s EIN and address can be found on your 2022 tax return. We would be happy to upload our W-9 to your portal if requested.
  1. 1099-MISC for Landlords – Payments for rents should be reported on form 1099-MISC. This form should be provided to landlords by 1/31/24 and filed with the IRS by 2/29/24 (3/31/24 if filing electronically).
  1. Mixed Payments for Goods and Services – 1099s are not issued for the purchase of goods, but a payment that includes goods incidental to the services should list the combined total. An example would be an auto repair bill with labor and parts.
  1. Payment Methods – Payments to service providers by credit card and PayPal are not reported on 1099-NEC since credit card companies/PayPal issue Forms 1099-K to the service providers directly. Your business should report payments made by cash, check, ACH, Popmoney, and similar services. Venmo Business is now also sending 1099s directly to vendors.
  1. Exceptions – In general, 1099s are not required to be issued to businesses being taxed as corporations, unless they are law firms or medical providers. Payments to vendors that total under $600 for the year are also not required to be reported. Details are available here: https://www.irs.gov/instructions/i1099mec
  1. Contractors – The Colorado Department of Labor & Employment (CDLE) has significantly stepped up its audits of small businesses to determine if employees have been incorrectly classified as contractors. Consequently, it’s more important than ever to ensure that individuals who perform services for your business are correctly classified before 12/31/2023.  More information is available at https://cdle.colorado.gov/ensure-proper-worker-classification and https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
  1. Preparing & Filing 1099s
  • Now: Obtain a W-9 from your landlord and all your service providers. Check your records and request any missing ones now to avoid delays in January.
  • In January: Prepare & file the forms – If you would like to prepare 1099s yourself, there are a number of 1099 preparation websites that can help you prepare and file the forms.
  • If you would like Tandem to prepare and file Forms 1099 for your business, please contact our office.

(303) 499-7445

info@tandemcpas.com

287 Century Circle, Suite 200, Louisville, CO 80027

Tandem CPAs LLC  (Colorado firm license #FRM.5000548).

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