Feds green light stiffer penalties for these errors
Let your A/P department know: Getting 1099s filed accurately and efficiently should be a top priority right now.
That’s because the recent Small Business Jobs Act significantly increases the penalties that firms will get hit with for mistakes made during the 1099-filing process.
Fortunately, you have some time to error-proof your processes. The higher penalties begin for returns that are required to be filed on or after Jan. 1, 2011 — coinciding with the expanded reporting requirements under the healthcare reform law.
So how much do the penalties go up? First-tier penalties — for correcting a filing mistake within 30 days — will be $30 per return, up from $15. These penalties max out at $250,000 per year, which is a huge jump from the current annual limit of $75,000.
Both second- and third-tier penalties will also double. Second-tier fines will jump to $60 for each incorrectly filed return, and third-tier penalties increase to $100 per return.
Readers, what does your company do to prevent 1099-filing errors?
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