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Important Information for Brown Plus Clients Regarding Form 1099 Filing

Important Information for Brown Plus Clients Regarding Form 1099 Filing

It’s hard to believe, but we are rapidly approaching the end of 2024! As the year comes to a close, there are many year-end reporting requirements for our clients to consider. One specific reporting requirement for clients to keep in mind is Form 1099 e-filings.

In 2023, the Internal Revenue Service (IRS) made a major change to its e-filing regulations for tax forms. If you file 10 or more returns (in aggregate, not a count by form type), those forms must be filed electronically.

If you meet this new e-filing rule, getting an early start to gather the necessary information before the end of the year will help to ensure timely Form 1099 e-filings. Whether you are an existing 1099 client at Brown Plus or you would like to newly engage Brown Plus for your 1099 filings, we are providing some information to assist you with the proper 1099 reporting requirements.

Form 1099 Filing Requirements

Our clients are advised to please keep the following Form 1099 filing requirements in mind:

  • Any person who, in the normal course of their trade or business, makes payments of rent, annuities, remunerations or other fixed or determinable gains amounting to $600 or more in a calendar year, has made a reportable payment and may be subject to the information return filing requirements.
  • If you are a fiscal year taxpayer or an accrual basis taxpayer, reportable payments must be converted to calendar year and cash basis (i.e., adjusted for any accruals at the beginning and end of the year).
  • Effective starting in 2020, Form 1099-NEC, Nonemployee Compensation, was implemented by the IRS in place of box 7 on Form 1099-MISC, Miscellaneous Information. A separate Form 1096 will need to be filed with each batch of 1099-NECs and 1099-MISCs.  Both Copy A (to the IRS) and the Recipient Copy of Form 1099-NEC are due by Friday, January 31, 2025.
  • Late filing and/or incorrect information of Form 1099s could lead to penalties ranging from $30 to $100 per form, with a maximum of $500,000 per year, for small businesses.
  • Please make sure to have vendors/payees complete a Form W-9 legibly, as the vendor/payee name must match the Social Security Number (SSN) or Employer Identification Number (EIN) as filed with the IRS. (Please note that, if the payee provides you with a SSN, you must use their first and last name, not their business name. If the payee provides you with an EIN, you must use the business name.)
  • Any payments of $600 or more made to anyone engaged in a trade or business for services (including parts and materials) must be reported on Form 1099-NEC, and any rent payments of $600 or more must be reported on Form 1099-MISC, except if the payee is incorporated. Payments made via credit card, PayPal, etc., are not required to be reported, since the vendor/payee will receive a Form 1099-K from the appropriate third-party network.
  • Any payments of $600 or more made to an attorney in the course of your trade or business must be reported on Form 1099-NEC, regardless of whether the attorney is incorporated. 
  • If you made a payment for material purchases only (no labor), you are not required to report these payments. 
  • You must issue a Form 1099-INT, Interest Income, to any individual to whom you pay interest greater than $10.

Required Documentation and Deadlines for Brown Plus 1099 Clients

If you file 10 or more returns and meet the new e-filing rule, there are several forms and templates that our Firm requires to upload our clients’ information returns electronically. Please email 1099@brownplus.com to receive a link to access several important documents, including:

  • Form W-9, Request for Taxpayer Identification Number and Certification,to obtain necessary reporting information from your vendors/payees
  • Pennsylvania REV-1832, 1099-MISC Withholding Exemption Certificate, which payors must provide to all payees for the payees to complete if the payor is not going to withhold on payments made to the payee
  • Excel templates for data imports for Forms 1099-MISC, 1099-NEC and 1099-INT

Completed Forms W-9, REV-1832 and Form 1099 Excel templates must be submitted to 1099@brownplus.com no later than Monday, January 20, 2025, in order to meet the filing deadline.

If you have not worked with Brown Plus to file your Form 1099s in the past and would like to work with us for tax year 2024: please send an email to 1099@brownplus.com to let us know prior to Friday, January 10, 2025.

Questions?

If you have any questions about filing Form 1099s with Brown Plus, please contact your Brown Plus advisor.

Posted In: Outsourced Accounting Services | Insights

About the Author - Abbie Cawood, CB

Abbie is an Outsourced Accounting Senior Manager at Brown Plus with over 13 years of experience. She specializes in QuickBooks® and has over 16 years’ experience with the program.

She is a certified bookkeeper with the American Institute of Professional Bookkeepers (AIPB) and is also certified in QuickBooks® Online as a ProAdvisor.

Disclaimer: Information provided by Brown Plus as part of this blog post is intended for reference and information only. As the information is designed solely to provide guidance and is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations, responding to such inquiries does NOT create a professional relationship between Brown Plus and the reader and should not be interpreted as such. Although Brown Plus has made every reasonable effort to ensure that the information provided is accurate, Brown Plus makes no warranties, expressed or implied, on the information provided. The reader accepts the information as is and assumes all responsibility for the use of such information.