Late filing of information returns can cost you money.
The IRS requires businesses to provide information regarding certain payments made over the course of a tax year on one of a range of Forms 1099. Small businesses most frequently use Form 1099-MISC to report payments of over $600 to non-employees, such as contractors and advisers. Businesses that file more than 250 Form 1099s must file them electronically. The IRS may charge a penalty fee for late filing.
The deadline for filing a Form 1099-MISC is January 31st.
If you fail to file a 1099-MISC by the due date, the IRS may charge a penalty fee. If you submit the Form 1099 within 30 days from the due date, the penalty is $50 per form. If you file the form more than 30 days late but before Aug. 1, the penalty is $100 per form. The penalty increases to $250 for any form filed after Aug. 1, and if you do not file at all (Intentional Disregard), the penalty is $500 per form. The IRS sets the maximum penalty as $1.5 million for small businesses, which are defined as having average annual gross receipts of less than $5 million for the three preceding tax years.
Recommendation: File on time, even if you are doing a partial filing. You can correct them later to add additional people. This way, you won’t be late! Otherwise, you can request an extension.