November 2011: W-2s and 1099s

Now is the time to be thinking about year-end filings such as W-2s and 1099s.  Have any of your employees or vendors moved or changed names due to getting married this year?  Be sure that your records are updated for any of these changes.  If Hochschild, Bloom & Company LLP maintains your records, please also inform us of any changes or additions.

The Internal Revenue Code provides that taxpayers not filing the required W-2s and 1099s or failing to meet Internal Revenue Service filing requirements may be subjected to a penalty of up to $100 per W-2 or 1099.  Penalties of at least $250 are assessed for intentional disregard of the filing requirements.

If a taxpayer fails to provide you with their social security number or employer identification number for the Form 1099 filing, you may be required to do backup withholding on the payments made to that person.  The current backup withholding rate is 28%.  If you requested the entities identification number and they failed to provide it, you may not be assessed a penalty because you have a reasonable cause for not including their identification number on Form 1099.  Form W-9 (or an acceptable substitute) is used to request a payee’s correct name, type of entity, and their reporting number.

Do not wait too long to gather all of this information.

Please call us if you have any questions.