The IRS has been increasing pressure on businesses and rental property owners to comply with the reporting requirements. Penalties have increased, and the business and rental schedules ask whether you are required to file 1099s — and whether you have, or will.

A 1099-MISC is required to report amounts paid for services of non-employees of $600 or more in a calendar year, and amounts paid for rent of business leases unless paid to a management company. You will need the name, address, and Social Security number (or tax ID number) of each person or entity you paid. Payments for services to corporations generally need not be reported, but payments to LLCs are required. For details and exceptions, see the IRS instructions (PDF).

Note that amounts as low as $10 of interest paid are required to be reported on 1099-INTs. A separate 1096 cover form and separate mailing is required for each type of 1099 filed.

1099s are due to the recipients by January 31st and to the IRS by January 31st. A 30-day extension is available with Form 8809 (PDF).

E-filing the 1099 forms automatically extends the due date to March 31st. Deziel's Tax Service does not e-file 1099 forms, but several online services do for a reasonably small cost.

The 1099s and cover page Form 1096 must be machine readable. It is best to type out the forms, prepare them on a computer program, or have them e-filed through a service. The distinct red ink of the 1099 and 1096 forms aligns them for machine reading, so you cannot download IRS PDFs and file them — although they are fine for the recipient's copy. You can order official (red-ink) 1099s, and other IRS forms like W-2s, through the IRS online ordering service. We order extras and have limited forms available at the tax office.

Where to mail

Completed red-ink 1099s and cover sheet 1096 for Minnesota and surrounding states are mailed to:

Department of the Treasury Internal Revenue Service
Kansas City, MO 64999

It is not required that a copy of the 1099 be sent to Minnesota unless there is Minnesota withholding, or there should have been. In such cases, filings of 10 or fewer 1099s can be mailed to:

Minnesota Revenue Mail Station 1173
St. Paul, MN 55146-1173

Filings of more than 10 1099s with withholding requirements must be e-filed to Minnesota — we cannot do this for you. It is best to e-file with the same service you chose to e-file your 1099s to the IRS; make sure that service is available for Minnesota before choosing a provider. A search for a "1099 e-file service" turns up several providers that charge only about $4 per 1099, far cheaper than we could prepare them for.

Questions?

Call us at (651) 631-0571 to reach your preparer. See also our tax deadlines.

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