For small business owners, you should be aware that the IRS has moved up the filing due date for 1099-MISC forms that report non-employee compensation in Box 7.  The new due date is January 31st, the same as the date the forms are supposed to be issued to recipients.  For other types of 1099 filings, the due date is unchanged and is the end of February in the year after the income was paid.

Businesses have to file a 1099-MISC for payments of $600 or more to independent contractors during the course of the year.

The penalty for not issuing the form on time is $30-$100 per form, depending on how late the form is, up to $500,000.  If non-issuance is intentional, the penalty can be $250 per form with no limit.

If you don’t receive a 1099-MISC, you should report the income anyway.  It is not a mismatch if you report extra income.  You will get a mismatch letter if the IRS has records of payment to you that you don’t report.  This often happens when the issuer of the 1099 has the wrong address for you.  The business that issues the form will be concerned with filing on time to avoid penalties, not on whether the address is correct.

If you don’t claim income reported to the IRS and get a mismatch letter, you will owe taxes, penalties and interest for under reporting income.  These charges can add up quickly.  You should always update the 1099 issuers with changes in your address but you should also be sure that the post office has a change of address on file if you move and you can also file a change of address Form 8822 with the IRS.  You want to make sure that you get copies of anything the IRS receives to avoid extra costs and headaches.

The earlier filings will be a bit of a pain for businesses but should be helpful to contractors that like to file early in the tax season.