Form 1099 Filing Requirements for 2024 — A Quick Guide
Read through this guide to understand the 1099 filing requirements and navigate through the year-end filing season with ease!
As the tax season has already started, businesses must stay up-to-date on the most recent changes to tax laws, especially those about 1099 reporting.
Form 1099 is an essential document used to record many kinds of income, and correct and compliant tax filings depend on being up to date on the most recent regulations.
From filing deadlines and specific reporting thresholds to changes in electronic filing mandates, understanding these requirements is paramount for businesses, tax professionals, and anyone involved in financial transactions that trigger 1099 reporting obligations.
In this comprehensive guide, we will delve into the critical aspects of the 1099 reporting requirements for the year 2024.
1. Electronic filing Requirements for 1099 in 2024
One of the significant changes that the filers will have to adapt for filing in 2024 is the change in 1099 e-file requirements!
The Internal Revenue Service published regulations on February 23, 2023, significantly increasing the need to file tax and information returns electronically.
The IRS has lowered the electronic filing threshold from 250 returns to 10 or more returns. This means electronic filing with the IRS is mandatory if businesses file at least ten annual aggregate information returns.
For example — A firm needs to file four 1099-NEC, five 1099-MISC, and three 1099-S for the 2024 tax year. In this case, they must e-file these forms since the total form count is more than 10.
2. Form 1099-K Threshold Delay
When the IRS announced the threshold change for the 1099-K last year, it was believed there would be a huge spike in 1099-K volumes for the 2023 tax year. Nevertheless, the IRS has yet again postponed this threshold change!
The new $600 Form 1099-K reporting threshold for third-party settlement organizations (TPSSOs) will not be implemented, according to an announcement made by the Internal Revenue Service (IRS). The requirement for filing 1099-K is 200 transactions and $20,000 for the tax year 2023, postponing the originally scheduled $600 threshold. In response to input from payment processors, tax experts, and taxpayers, the decision was reached to consider 2023 as a transition year.
3. 2024 Deadlines for 1099 Reporting
Business owners must submit the respective 1099 forms before the deadlines; otherwise, severe penalties for late submissions or incorrect information will be imposed.
The deadline for each 1099 form may vary. For example, the e-filing deadline for 1099-NEC is January 31, 2024, and for 1099-MISC, 1099-K & other 1099s, the e-filing deadline is April 1, 2024.
Having said that, the recipient copy deadline for most 1099 forms is January 31, 2024. However, there are some exceptions to this deadline:
- Form 1099-MISC (Box 8 or 10)-The deadline for Recipient copies is February 15.
- Forms 1099-S and 1099-B- The deadline for Recipient copies is February 15.
To learn more about the deadline for 1099 forms, click here.
4. Penalties for late filings of 1099 forms
The penalties range from $60 — $630 per missing 1099 tax form, depending on how late the forms were submitted. The penalties for late filings came into effect after December 31, 2023. Charges for each information return are as follows :
- $60- If the 1099 form is not filed within 30 days of the deadline date
- $120-If the 1099 form is filed 30 days after the deadline but filed before August 1.
- $310- If the 1099 form is filed after August 1.
- $630-Intentionally neglecting to file
5. Additional filing requirement — Form 1096
Typically, Form 1096 is needed when you send paper forms to the IRS; however, if the forms are filed electronically, there is no need to fill out Form 1096 separately as it will automatically generated by e-file providers like TaxBandits.
6. State filing
All 1099 forms must be submitted to the IRS, and the copy should be distributed to the recipient, but some forms must also be submitted to the Department of Revenue for specific states. The taxpayer must submit the 1099 forms to their state or the appropriate state, along with any additional information that may be needed, depending on the state. Unless the state participates in the Combined Federal/State Filing (CF/SF) program and does not need extra information filing, payers should assume filing is required.
For more information about the states participating in the Combined Federal/State Filing (CF/SF) program for the 1099 series, click here.
Meet the 1099 Filing requirements with TaxBandits
Meeting 1099 reporting requirements for 2024 is made easy and accurate with TaxBandits. The IRS-authorized e-file provider facilitates the electronic submission of 1099 forms and offers tools for correct and efficient filing, including internal error checks, TIN matching, and bulk data import.
TaxBandits supports 1099 filing with both the federal and state. Also, the businesses can efficiently distribute the recipient copies digitally or via Postal Mail.
With TaxBandits, complying with the 1099 reporting requirements is not just a task; it’s a confident stride toward tax compliance.
