What Happens if 1099s Are Filed Late?

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.

When to File 1099

The deadline for filing a Form 1099-MISC is January 31st.

Penalties for Late Filing

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.