1099 Requirements for 2017

Our Company

We are committed to helping each of our clients succeed. For this reason our employees attend specialized classes and conferences to keep up-to-date with the latest audit, accounting, and tax requirements.

The IRS requires that you file information returns (1099s) for cash and check payments made by your trade or business to individuals not treated as your employees.  Non-incorporated partnerships and LLCs are also subject to this requirement.   

The below is also available in PDF Format Here.

The payments include such things as:
                                                                                                        Amount Requiring Reporting

Contract Labor, Commissions, Director Fees and
Other services provided to your business                                                  $600 or more

Dividends, Interest and Royalties                                                               $10 or more

Professional Fees                                                                                      $600 or more

Rents (other than to real estate agents)                                                    $600 or more

Attorneys Fees for legal services                                                               $600 or more

Payments to attorneys for settlements                                                        ALL

At this time, payments to corporations are exempt with the exception of legal services.  There are other payments which may also require a 1099 to be issued, such as gambling winnings, fishing income, and others.

Beginning in 2012, there was an important change to 1099 reporting that must be considered when compiling your 1099 amounts. The 1099-K form will be issued for all merchant and third-party network payments.  Basically, this new form will report all payments made to businesses via credit card processors.  The merchant and third-party companies are responsible for preparing 1099-Ks; therefore, any items a business pays through a credit card should not be included in the amounts compiled for 1099-MISC forms. 

Baldwin CPAs is a partnership for income tax purposes and thus all clients who pay our firm over $600 are required to prepare a 1099 for our professional services.  Our federal EIN is 20-1416603.  Keep in mind per above information, if our invoices were paid via credit card, a 1099 is not required.

Baldwin CPAs would be happy to prepare or assist you in the preparation of your 1099s.  To ensure accurate preparation, please forward the name, address, social security or federal identification number, amount and type of compensation (rent, dividends, commissions, etc), and phone number for all recipients.  The deadline for submission to the IRS of 1099 forms for 2017 is January 31, 2018.  Prior to 2016, the deadline was February 28.  Therefore, in order to comply with the IRS deadline, please provide necessary information to our offices by January 15, 2018.  

Affordable Care Act Requirements

For 2017, employers who have 50 or more full time employees are required to submit Form 1095-C to their employees on or before January 31, 2018 along with a copy to the Internal Revenue Service by February 28, 2018.  Be sure to check with your Third Party Administrator to see if they will be handling the additional filing requirements which are required by The Affordable Care Act.  Please call us if you have any questions regarding this new reporting requirement or need assistance in the completion of Form 1095-C.

Certain W-2 Requirements

You should also be aware of what must be included on your employees W-2’s for 2017. 

    Include in Gross Wages Subject to FICA Tax
Wages Yes Yes
Christmas bonuses Yes Yes
Tips Yes Yes
Other compensation Yes Yes
Value of group life insurance policy in excess of $50,000.00 Yes Yes
Amounts paid to employees for business expenses under a non-accountable plan or payments in excess of allowed amounts Yes Yes
Moving expenses In some cases In some cases
Scholorships and fellowship grants In some cases In some cases
Sick pay Yes Yes
Fringe Benefits    
  Automobiles furnished (personal portion) Yes Yes
  Club dues Yes Yes
  Tickets to sporting events Yes Yes
  Flights on company planes Yes Yes
  Flights on commercial planes Yes Yes
  Discounts on property or services Yes Yes
  Financial conseling plan benefits Yes Yes
  Education assistance payments In some cases In some cases
  Legal and educational services Yes Yes
Retirement plan contributions (employer's match) No No
Health insurance coverage for 2% owners S Corporations Yes No


On 2017 forms W-2, employers who filed at least 250 W-2s for 2016 must continue to report the aggregate (employer and employee paid) cost of employer-sponsored health insurance coverage on Form W-2 in box 12, using code DD.  Employers filing less than 250 W-2 forms for 2016, have the option of including this information on their W-2 forms.

Recipient copies of 1099s and W-2s should be distributed on or before January 31, 2018.  Forms 1099 and W-2 along with their respective transmittal forms must also be submitted to the Internal Revenue Service or Social Security Security Administration by January 31, 2018.  If you have over 250 information returns, you must file all federal forms electronically.  Kentucky requires electronic filing on all returns over 100 forms.

Penalties will apply for failure to file W-2 and 1099 forms by the due dates.  Due to the earlier due date of January 31, 2018, it is extremely important to provide the information to Baldwin CPAs as early as possible.  Applicable penalties will be based on when the W-2 and 1099 forms are actually filed. The penalties for failure to file timely on forms W-2 and 1099 starts at $50 per 1099 and W-2. This penalty amount increases the later the returns are filed.  Also, improper filing of information returns can result in other substantial penalties.

The IRS has backup withholding regulations that require you to deduct and withhold income tax at a 28% rate if the payee fails to furnish an identification number to you. 

These are the most common rules and requirements for W-2 and 1099 forms.  The laws and regulations which apply to these forms are very complex, and there are many situations to which unique requirements apply.  The staff at Baldwin CPAs will be happy to assist your business comply with the filing requirements.