Tax period is on full speed. Businesses, both and small and large, are focused on gathering the required information to file Form 1099 MISC.
With the re-introduction of Form 1099-NEC Online, redesigned Form 1099-MISC Online, redesigned W-2 Form Online, and more such minor and major changes, business taxpayers have to keep a lot of things on their checklist before they proceed to draft the forms for validation.
Please note to refer to this guide before you prepare your tax forms so you don’t have to worry about the details at the last minute.
Start with sending W-9 Form Online to your vendors
Previously you start filling the forms with relevant details, it is important to send the W-9 forms to vendors to get the required vendor information. Do not plan vendor information timelines right before the deadlines. Plan these things at least a week or two prior to the IRS due date. Once the vendor sends their data, you can replicate the useful information in your 1099 forms, more specifically in Form 1099-NEC Online.
Send copies of related 1099 Tax forms to recipients
Speaking of vendors; be sure to draft and send copies of 1099 forms to the required recipients, state departments, and of course, the IRS. If you do not send the copies of your forms to your recipients, it creates room for foul tax practices by your recipients. And if the information filed by your vendors doesn’t match the information in your forms, things would become even complicated. Maintain a healthy dialogue with your recipients and send relevant copies of 1099 forms to the required parties.
Pay attention to TINs, EINs,
Tax Identification Numbers, Employee Identification Numbers, and Social Security Numbers of your recipients must be checked against the IRS file through TIN Matching services. You can do this on the official portal of the IRS here or choose TaxSeer’s TIN Matching service from your TaxSeer dashboard.
Don’t ignore penalties and dues owed to state & federal authorities
When you are entering the information in your tax forms, don’t forget to declare the amounts that you have withheld from your recipients, and of course specify the local, state, and federal taxes that you have withheld. Apart from backup withholdings and tax withholdings, it’s important to also specify the dues/penalties/fines that you owe to local, state, and federal authorities, including the IRS to ensure compliance.
Check state filing requirements
Different states have different filing need. With the reinstatement of Form 1099-NEC, the IRS is focusing on businesses that previously have had a record of misclassifying their employees.
If your business is running within the California state limits or if your workers are operating from California, then you need to be all the more careful when classifying them as employees or independent
Use TaxSeer To Bulk E-Filing Your Tax Forms In 2021
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You should simply check the Forms for exactness before you in a split second e-file them to the IRS.
