If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099 after the end of the year to avoid facing the loss of the deduction for their labor and expenses and to avoid a monetary penalty. The 1099s for 2011 must be provided to the independent contractor no later than January 31, 2012.
In order to avoid a penalty, copies of the 1099s need to be sent to the IRS by February 28. The 1099s must be submitted on magnetic media or on optically scannable forms (OCR forms).
If you have questions or need assistance preparing 1099s, contact the Tax Experts at Henssler Financial: 770-429-9166 or experts@henssler.com.
