Important Topics:
1099 Information Returns - UPDATED!
Revised Form 990
Compliance Guide for 501(c)(3) Public Charities
1099 Information Returns - UPDATED!
Businesses (as well as non-profit organizations and governmental units) are required to file Form 1099 information returns for various payments made throughout the year. These forms are to be used to report payments to individuals and partnerships paid by you as follows:
Kind of Payment
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Amounts to Report - Total for the Year
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Dividends and Royalties
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$ 10.00 or more
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Interest paid in the course of trade or business
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600.00 or more
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Rent
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600.00 or more
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Payments for services performed for a trade or business by people not treated as its employees. For example, commissions, sub-contractors, directors fees, accounting fees, etc.
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600.00 or more
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Distributions from retirement or profit sharing plans, SEPs, or insurance contracts
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10.00 or more
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Payments to Attorneys (For legal fees, the exemption from reporting payments to corporations no longer applies)
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600.00 or more
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Please note that as a business owner, you are responsible for filing various information returns with the Internal Revenue Service, including Form 1099s, in addition to normal income and payroll tax returns. We can assist you in the preparation of these returns. To assist in your information gathering, we have provided a 1099 information spreadsheet that you can download and complete by clicking here.
Form W-9 should be completed by all payees prior to making any payments that would require a 1099 form. Failure to file the forms and failure to provide account numbers are each subject to significant penalties per failure. For businesses located in Pennsylvania, 1099 forms are to be filed with the Internal Revenue Service Center, Austin, TX 73301.
NOTE: On the recipient’s copies, you are required to include the telephone number of a person to contact in case of questions. It is recommended that the contact phone number be included in the section with the filer’s name and address.
PLEASE NOTE: In March 2010, the Patient Protection and Affordable Care Act changed the 1099 reporting requirements so that all payments made by persons engaged in trade or business in excess of $600 (including those in exchange for property) were reportable payments beginning after December 31, 2011. In addition, the Small Business Jobs Act added a provision to 1099 reporting that included all taxpayers who receive rental income into the reporting requirements beginning after December 31, 2010. On April 14, 2011, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 was signed into law and effectively REPEALED both prior 1099 reporting changes. All 1099 reporting requirements will continue as if both prior Acts had not been enacted.
Revised Form 990
In 2008, the IRS redesigned the Federal Form 990 – Return of Organization Exempt From Income Tax and introduced a phase-in timeline that gave smaller entities more time to begin using the new form. The new form is far more detailed than ever before and will require considerable planning and completion time, especially for the first year. In 2010, the phase-in has completed and currently, most nonprofit entities with gross receipts greater than $200,000 or total assets greater than $500,000 must use the new form for the 2010 tax year. Entities with gross receipts between $50,000 and $200,000 and total assets less than $500,000 may continue to use the 990-EZ form. Entities with gross receipts less than or equal to $50,000 must file a 990-N, a much more concise and simpler form.
Compliance Guide for 501(c)(3) Public Charities
Are you a director, trustee or key employee for a charitable organization? Do you want to avoid problems with the IRS. The IRS has released a publication entitled "Compliance Guide for 501(c)(3) Public Charities". This publication provides readers with an overview of various compliance issues that are important for public charities. To access this publication (Publication 4221-PC), go to http://www.irs.gov/pub/irs-pdf/p4221pc.pdf.
