These are for whenever you pay independent contractors $600 or more, say for your attorney or computer consultant (to get more information on this topic, you can click here). The IRS mandates that you send a 1099-MISC to each person by January 31st. The agency will then also want a copy by February 28th. Although, this deadline is extended to March 31st if you use electronic filing.

And what if you miss any of these?  Well, there will be penalties, which depend on how late you are with the filings.

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                                                        2013 / 2014 1099 Deadline Penalty - 1099-MISC Deadline Penalty

If you fail to file a correct 1099 information return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely, you fail to include all information required to be shown on a 1099 return, or you include incorrect information on a return. The 1099 penalty also applies if you file on paper when you were required to file 1099s electronically, you report an incorrect TIN (Tax Identification Number) or fail to report a TIN, or you fail to file paper 1099 forms that are machine readable. The amount of the 1099 deadline penalty is based on when you file the correct information return. The penalty is:

$15 per information return if you correctly file within 30 days (by March 30 if the due date is February 28); maximum penalty $75,000 per year ($25,000 for small businesses).

$30 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $150,000 per year ($50,000 for small businesses).

$50 per information return if you file after August 1 or you do not file required information returns; maximum penalty $250,000 per year ($100,000 for small businesses).

Now you can fill out the 1099-MISC forms yourself – but this is probably a bad idea.  While they may seem easy, there are some potential landmines.

Without a doubt, pass this on to anyone you know who has a business and might be effected by this information.