It seems like we just rang in the new year, but, unbelievably, the first tax filing deadline is already upon us. By January 31st, businesses, nonprofits, and others who make certain payments must report them on IRS Form 1099. In general, Form 1099 must be completed and filed for each person or unincorporated business to whom $600 or more was paid during the year for rents, nonemployee income payments, and other payments defined by the IRS.
Here are four tips to meet the Form 1099 Tax Filing Deadline:
Payments are reported on Form 1099-NEC (i.e., nonemployee compensation). The payor must report the name, tax ID, and amount paid for each applicable entity to whom $600 or more was paid during the year. For more information about Form 1099-NEC, including instructions, go to https://www.irs.gov/forms-pubs/about-form-1099-misc.
The due date for filing Form 1099-NEC is January 31st for the calendar year ending December 31st. There is no extended filing deadline for submitting this form.
Reporting on Form 1099-NEC does not apply to personal payments. The form is only used for payments made as part of a business, nonprofit, trusts of qualified pension or profit-sharing plans of employers. Like many IRS rules, there is an exception – payments to attorneys for legal fees.
Some payments do not have to be reported on Form 1099-NEC, although they may be taxable to the recipient. For example, payments to a C or S corporation, payments of rent to real estate agents or property managers, and business travel allowances paid to employees are generally not reportable on a Form 1099.
If you make payments as part of your business, nonprofit, trusts of qualified pension or profit-sharing plans of employers, your first tax filing deadline for 2022 could be coming up. Use these four tips to see if payments that you made in 2021 need to be reported to the IRS by January 31st.
The end of one year and the beginning of another is the perfect time to pause and savor your successes from the year that is ending. Celebrate both your business and your personal accomplishments from 2021, month by month. Reflections on the 2021 goals that you achieved can also be the genesis for planning what you want to achieve during 2022. You know what they say…a goal without a plan is just a dream.
Whether you are expanding, launching something new or maintaining the status quo, 2022 will be different than 2021. That means setting new goals and making a new plan. Starting is always the hardest part, so begin by identifying one overarching change you want to achieve by the end of the year. Want more customers, higher cash flow, or a new worker? Focus on achieving that one change, then break it down into manageable pieces.
Change doesn’t just happen; you need a plan to get it done. Follow these three planning tips to achieve your goals in 2022:
Gather the Numbers
Quantify all the applicable aspects of your goals. This task will require some research and could entail making estimates and assumptions. For example, how many more customers do you want? Can you quantify the additional income and cost of serving more customers? What about how much a new worker would cost and how much additional income they could generate? The more numbers you can nail down, the better.
Keep market conditions and your resource capacity in mind when setting growth and other goals. It’s important to be realistic to ensure that your goals are achievable. Setting unrealistic objectives is not only discouraging, but it can also result in allocating resources – aka time and money – on activities that are unlikely to succeed. Better to target those resources on realistic, achievable goals.
Adjust As Needed
No matter how well you research the numbers and focus on what’s realistic, any view of future events is imperfect, as we’ve seen with COVID-19. Market conditions and other factors that you depended on when setting your goals could change. Periodically assess progress on meeting your objectives. Are you on track? Why or why not? Based on those answers, you may need to make some adjustments.
The end of 2021 is the perfect time to savor your successes and to plan for what you want to achieve in 2022. Don’t let your goals turn into the dreams you never achieved. Establish a plan for 2022 and turn those dreams into your reality.