1099 Reporting Requirements for 2023 - An Overview
Updated on January 18, 2024 - 10:30 AM by Admin, TaxBandits
The 1099 forms serve as a series of information returns utilized by the Internal Revenue Service (IRS) to monitor income paid to independent contractors and other non-employees. For the 2024 tax year, it is crucial to be aware of a few key updates in relation to the 1099 reporting requirements.
Table of Contents:
1. Updates on 1099 Reporting Requirements for the
2023 Tax year
There are no major changes in Form 1099 for the 2023 tax year. However, there are important updates you should be aware of:
- Electronic Filing Threshold: The IRS has lowered the electronic filing threshold from 250 returns to 10 or more returns. This means that if you file at least 10 aggregate information returns in a year, electronic filing with the IRS is now mandatory. For example, if your total aggregated return is 12 (three 1099-NEC, four 1099-MISC, and five 1099-S), you should opt for e-filing.
- Form 1099-K Threshold Delay: There's a temporary reprieve for Form 1099-K reporting. The threshold for payment card transactions from third-party settlement organizations (TPSSOs) like PayPal and Venmo will be $20,000, with more than 200 transactions for the 2024 tax year, delaying the initially planned $600 threshold.
2. 2024 Deadlines for 1099 Reporting
Most of the 1099 Forms have the same deadline, which is
- January 31st: Recipient copies distribution
- February 28th: Paper Filing
- April 1st: E-filing deadline
However, there are some exceptions to this deadline
- Form 1099-NEC: Both recipient and IRS copies are due by January 31.
- Form 1099-MISC (Box 8 or 10): Recipient copies due by February 15.
- Forms 1099-S and 1099-B: Recipient copies due by February 15.
3. New 1099 Penalties for 2024
Due to inflation, the IRS has increased the penalty rates for Form 1099. Effective after December 31, 2023, potential penalties include:
- $60 per form- if Form 1099 is not filed within 30 days of the due date.
- $110 per form - if Form 1099 is filed 30 days after the deadline but filed before August 1.
- $310 per form- if Form 1099 is filed after August 1.
- $630 per form: Intentional disregard.
4. Information Required to Report on Form 1099s
The information required to report on Form 1099s varies depending on the type of form and the nature of the payment. However, the following is some of the general information necessary to complete Form 1099.
- Payer's name and Tax Identification Number (TIN)
- Recipient's name and TIN
- Type of payment (e.g., non-employee compensation, rent, royalties)
- State Filing details
5. Meet Your 1099 Reporting Requirements with TaxBandits
E-filing your Form 1099 with TaxBandits is a breeze. Select the required forms, fill in the information, and transmit them seamlessly to the IRS and states. TaxBandits supports e-filing for various 1099 forms, providing features like bulk upload, TIN matching, and internal error checks for accurate and streamlined filing. Additionally, choose to distribute recipient copies via postal mail or e-delivery.
Beyond e-filing, TaxBandits offers a W-9 Manager for simplified W-9 information collection and management. Experience the convenience and efficiency of TaxBandits – get started today!
