We excluded anyone that we only paid for merchandise when we filed 1099-MISC forms, but we now have a vendor that would like us to send him one. Do we need to submit this to the IRS and would it be considered late by the IRS?

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Did you make reportable payments to the vendor who is requesting a 1099?  If it is a merchandise-only vendor, then you were correct to exclude them.  If, however, you did make some kind of reportable payments (services, rent/lease, royalty…) and those payments meet the reporting thresholds, then you must issue a 1099.

Late filing of a single 1099 is not a big deal, though the sooner you file, the better.  The penalty for late submission of a single 1099, if submitted by March 30, is only $30. What’s more, a single late filing often will not result in a penalty notice. If you do receive a proposed penalty (972CG—sent in August), you can send a letter explaining the circumstances and might get the penalty abated.

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