As a business owner, filing taxes can be a tedious task. It’s one of those things that no one likes to do, but it’s necessary. When it comes to filing 1099s, the process can be even more stressful. You need to make sure that you have all of the necessary information from your contractors, including their names, addresses, and tax identification numbers, and then you need to get those forms filed on time. But what if we told you that delaying the filing of your 1099s until March 31st could actually benefit your business? In this article, we’ll explore why waiting until the last minute can be beneficial, and provide you with some tips and tricks for streamlining the process.

What is a 1099 form?
Before we dive into the due date for 1099 forms due on March 31st, let’s briefly discuss what a 1099 form is and who needs to file one. A 1099 form is used to report income earned from sources other than wages. This includes income earned from self-employment, freelance work, interest, dividends, and other sources.

As a business that has self-employed individuals or freelancers, you may be familiar with the 1099 form in its latest iteration, the 1099-NEC, which is used to report income earned from sources other than wages.
If you are required to file a 1099 form, it is important to know the deadline for submitting it to the IRS. In most cases, the deadline for filing a 1099-NEC form is January 31st.

However, there are different due dates for some types of 1099 forms.

If you are a freelancer or self-employed individual who received payments of $600 or more from a single client or company during the tax year, you are required to file a 1099 form. Additionally, if you received rental income, investment income, or other types of income that are not reported on a W-2 form, you may also be required to file one of the other 1099 forms.

There are several types of 1099 forms, each used to report different types of income. Some common types of 1099 forms include:

• 1099-MISC: This form is used to report income earned from self-employment, freelance work, and other types of non-employee compensation.
• 1099-INT: This form is used to report interest income received from a bank or other financial institution.
• 1099-DIV: This form is used to report dividend income received from stocks and other investments.
• 1099-R: This form is used to report distributions from retirement accounts.

Now that we have a basic understanding of what a 1099 form is and who needs to file one, let’s discuss the due date for 1099 forms due on March 31st.

Due date for 1099 forms due on March 31st
While most types of 1099 forms are due on January 31st, there are some important exceptions.

If you are required to file a 1099 form for payments made to an independent contractor or freelancer, the due date is typically January 31st.

Specifically, the due date for filing Form 1099-NEC (Nonemployee Compensation) with the IRS is January 31st. This form is used to report payments of $600 or more made to independent contractors, freelancers, and other non-employees for services rendered. However, if you made payments to an independent contractor or freelancer for work or services performed outside of the United States, the due date is March 31st.

Why Waiting Until March 31st Can Be Beneficial (or at least not the worst idea in the world)
The deadline for filing 1099s is typically January 31st, so why would waiting until March 31st be beneficial? The answer is simple: it gives you more time to collect and verify all of your information. When you file early, you run the risk of missing out on critical information that could impact your filings. For example, if you receive a corrected W-9 from a contractor after you’ve already filed your 1099s, you’ll need to file an amended return. This can be time-consuming and could potentially result in penalties or fees.

By waiting until the end of March, you give yourself extra time to collect and verify all of your information. You’ll have a better idea of who should receive a 1099 and who shouldn’t, which can lead to more accurate filings. Plus, if you’re like most business owners, you’re probably swamped with other tasks throughout the year, so waiting until the last minute to file can give you a chance to catch up on other important business matters.

Of course, waiting until March 31st isn’t a perfect solution, and I would argue it’s a horrible solution all else being equal. You’ll still need to make sure that you have all of the necessary information from your contractors, and you’ll need to be diligent about keeping track of deadlines. But if you’re looking for a way to simplify the process and potentially save yourself some time and money, waiting until the last minute could be a good strategy vis-a-vis omitting a required 1099 and/or filing incorrect 1099s. Bottom line, unless you’re not going to do things correctly, namely correct reporting and filing, never ever wait until the last minute.

It is important to note that if you are required to file a 1099 form and miss the deadline, you may be subject to penalties and fines. The amount of the penalty will depend on how late the form is filed, and the total number of forms that were not filed on time. The penalties are massive and soul destroying, so please, make sure you file the required forms on time, every time.

How to file a 1099 form
If you need to file a 1099 form(s), there are several steps you need to take. First, you will need to obtain the necessary information from the person or entity to whom you made payments. This includes their name, address, and Taxpayer Identification Number (TIN). Normally, you won’t deduct amounts, and even if you are, that information typically isn’t required to file because these filing are generally the amount provided to the other party.

Next, you will need to fill out the appropriate 1099 form, depending on the type of income you are reporting. Be sure to double-check all of your information. Adjustments can be expensive on many levels.

Strategies for Making the Most of Your Time Before Filing
If you’re planning on waiting until March 31st to file your 1099s, there are a few strategies you can use to make the most of your time. First, make sure that you have all of the necessary information from your contractors. This includes their names, addresses, and tax identification numbers. You should also make sure that you have accurate records of the payments you made to each contractor throughout the year.

Common Misconceptions About Waiting to File 1099s
There are some common misconceptions about waiting until March 31st to file 1099s. One of the biggest misconceptions is that waiting will automatically lead to penalties or fees. While it’s true that there are penalties for filing late, these penalties are based on the number of days that you’re late, not on the date that you file. In other words, if you file on March 31st, you won’t be penalized as long as you meet all of the other requirements.

Another common misconception is that waiting to file will increase your chances of being audited. While it’s true that the IRS does sometimes target businesses that file late, the likelihood of an audit is based on a number of factors, including the size of your business, the nature of your industry, and your past history with the IRS. Simply waiting to file your 1099s won’t necessarily make you more likely to be audited.

It’s also important to note that waiting to file your 1099s won’t impact your ability to deduct payments to contractors on your tax return. As long as you have accurate records of the payments you made, you can deduct those payments regardless of when you file your 1099s.

The Potential Risks of Waiting Too Long to File
While waiting until March 31st to file your 1099s can be beneficial, there are also some potential risks to be aware of. First, if you wait too long, you run the risk of missing the deadline and incurring penalties. The penalties for filing late can be significant, so it’s important to make sure that you’re aware of all of the deadlines and that you have a plan in place to meet them.

Another risk of waiting too long is that you may run into issues with your contractors. If you wait until the last minute to file your 1099s, you may not have enough time to resolve any issues that arise with your contractors. For example, if a contractor disputes the amount of money that you paid them, you’ll need to resolve that issue before you can file your 1099s. If you wait until the last minute, you may not have enough time to resolve the issue before the deadline.

Finally, waiting too long can be stressful, expensive (directly and/or opportunity cost) and time-consuming. If you’re rushing to file your 1099s at the last minute, you may make mistakes or overlook important information. This can lead to even more stress and potentially even more penalties or fees.

Tips for Streamlining the 1099 Filing Process
If you’re planning on waiting until March 31st to file your 1099s, there are some tips and tricks you can use to streamline the process. First, make sure that you have accurate records of all of the payments you made to contractors throughout the year. This includes the amount of each payment, the date of each payment, and the name of the contractor. Having accurate records will make it easier to fill out your 1099 forms and will help you avoid mistakes.

Next, consider using a software program or online service to help you organize your information and file your 1099s. These programs can help you avoid mistakes and ensure that you meet all of the necessary deadlines. They can also save you time and help you avoid the stress of filing at the last minute.

Finally, consider outsourcing the task of filing your 1099s to a trained professional. This can be a good option if you’re short on time or if you’re not confident in your ability to file accurately. A professional can help you navigate the complex rules and regulations surrounding 1099 filing, and can ensure that your forms are filed correctly and on time. It can also be the cheaper option after factoring in your opportunity cost (time), the risk of paying penalties (which a lot of business owners end up paying), paying staff to figure it out, and buying extra software.

The Impact of Timely 1099 Filing on Your Business’s Bottom Line
Filing your 1099s on time can have a significant impact on your business’s bottom line. First, timely filing can help you avoid penalties and fees. If you file late, you may be subject to penalties of up to $280 per form, depending on how late you file. These penalties can add up quickly and can have a significant impact on your bottom line.

In addition to avoiding penalties, timely filing can help you avoid stress and potential legal issues. If you file late and are subject to penalties, you may also be subject to legal action. This can be a stressful and time-consuming process, and can potentially cost you even more money in legal fees. Especially if you have to hire a tax attorney such as myself to communicate with the IRS.

Finally, timely filing can help you avoid issues with your contractors. If you file your 1099s on time, your contractors will receive their forms in a timely manner, and they’ll be less likely to dispute the information on those forms. This can help you avoid potential issues and can help you maintain positive relationships with your contractors.

Tools and Resources to Help You Stay on Top of 1099 Filing
If you’re looking for tools and resources to help you stay on top of 1099 filing, there are a few options available. First, consider using a software program or online service to help you organize your information and file your 1099s. Quickbooks for example works well, and it’s one we use in our office. We’re also a QuickBooks provider, and can offer a discount if you would like to get it from us. Otherwise, there are many other accounting and bookkeeping programs that work fantastic at various price levels too. These programs can help you avoid mistakes and ensure that you meet all of the necessary deadlines. They can also save you time and help you avoid the stress of filing at the last minute.

Another great option for many, especially newer business owners is to outsource the task of filing your 1099s to a professional. This can be a good option if you’re short on time or if you’re not confident in your ability to file accurately. A professional can help you navigate the complex rules and regulations surrounding all tax filings and can ensure that your forms are filed correctly and (hopefully) on time. Feel free to reach out if you would like to hire us to file your forms, provide tax advice, and/or bookkeeping/accounting.

Finally, make sure that you’re aware of all of the deadlines and requirements surrounding 1099 filing. The IRS website has a wealth of information on this topic, including deadlines, penalties, and the forms that you need to file. Make sure that you’re aware of all of the requirements and that you’re taking steps to meet them.

Conclusion
As a business owner, don’t wait until the last nano second, albeit if you don’t have the ability to file correctly, waiting until the end of your time limit may be the better option. As always, never trust anything on the internet, and no warranties or guarantees of accuracy are provided here. You want to use this information as a starting point, and not rely on it for your actions.