New for Tax Year 2011
You are no longer required to send 1099 forms to ALL corporations. That part of
the law was canceled.
There is a new and dangerous hidden Tier 3 penalty of $100 per form for
mis-matched Tin/Name combinations. It is dangerous because you will not know
about it until it's too late. That's a $1000.00 fine for just 10 mis-matches.
But there is an easy solution. Please see Tin Matching for more information.
New: The IRS has extended the pilot program for SSN Masking (Truncation) Program. This OVERRIDES the
1099 General Instructions "What's New". See this link for all information:
responsibility for protecting recipients from identity theft has been placed on
the filing company by the IRS under this new program.
In December 2009, the IRS announced a new program to increase security by
allowing you to mask the first 5 digits of recipients SSN.
For example, the SSN would be shown as XXX-XX-6789. This applies only to
the recipient copy only, which is usually sent in the mail. SSN Masking
does not apply to the IRS Copy A (the red scanner ready pre-printed
forms) which are mailed in a bundle to the IRS and could be stolen from the US
mail. This is another good reason to e-File your 1099 forms to the IRS using the
IRS secure transfer site, even if you have just a few.
It is easy to use this new security feature in 1099 Express. Unfortunately, because of this new IRS
ruling, if you choose not to mask your SSNs, you might be exposed to unnecessary risk
and/or liability. Under this program you may mask only Social Security Numbers coded
123-12-1234. You may not mask Employer Id numbers such as 12-1234567.
1099 Express does the work of substituting the X's automatically on the correct
forms! You are not expected to mask numbers manually. However, if you have
dash-less numbers, use the easy solution to set dashes in EINs only.
For complete details, see the HELP/INDEX menu Topic No. 37 in the 1099 Express program.
Printing 1099s to PDF files for e-Mailing to recipients
Paperless is the wave of the future. CPAs are often e-Mailing complete and
secure 1040 tax returns. 1099 Express has this new feature free at no extra
Instead of creating 1099s on blank paper with your laser printer, 1099 Express can create an encrypted,
password protected PDF file for each recipient. Each PDF file contains that person's 1099
form exactly as it would appear if created on blank paper. The password is the person's Tax ID
number. The PDF cannot be opened unless the recipient knows the Tax ID number.
This method is probably more secure than paper forms which could be
stolen in the mail.
Thus, if you have that person's e-Mail address, you can safely e-Mail each person's 1099
as an attachment.
Therefore, it would be a good idea to begin requesting each person's e-Mail
the W-9 form, if you want to use this feature. Warning: Never e-Mail 1099 forms unless they are password
protected. Doing so could subject you to risk and liability.
For complete details see the HELP/INDEX menu Topic No. 6a in the 1099 Express program.
State e-Filing requirements
For 2009 forward, many states are requiring e-Filing 1099 and W-2 forms. For example,
Minnesota requires that:
So how do I check my STATE's Requirements? Answer: CLICK HERE.
You can also see HELP/INDEX menu Topic No. 23 in the 1099 Express program.
- Tax Year 2009 e-File all W-2s or 1099s if more than 50 forms.
- Tax year 2010 e-File all W-2s or 1099s if more than 25 forms.
- Tax year 2011 e-File all W-2s or 1099s if more than 10 forms.
To avoid penalties, if you have to file to the
states, you might as well e-File to the IRS and the states at the same time
under the Combined Federal/State filing program. Each state had different
requirements. Some states may require the IRS
Pub. 1220 file, or the SSA EFW2 file, instead of the Combined Federal/State
1099 Express and W-2 Express software can solve these compliance issues in
almost every instance.
Disclaimer: This information is presented entirely for the benefit of
1099Express customers. 1099Exress, it's employees, agents and assigns, herein called 1099Express, do not, and can not,
give tax advise. You should consult your tax advisor and obtain advise based
strictly on your personal or business tax situation.
1099Express is not liable for any outcome based on the use of this information, and can not predict any outcome.
All information presented herein is used at your own risk and liability.