Small Business Owners Beware: Not Reporting Income Paid to Vendors Can Be Costly

Friday, August 21, 2015

Most individuals receive an Internal Revenue Service (IRS) Form 1099, Miscellaneous Income, early each calendar year as part of their annual tax return documentation. They normally hold the document for their tax return preparation and then file it away without thinking about it. Small business owners, too, must send 1099s to non-employees paid in the course of doing business. The New Jersey Society of Certified Public Accountants (NJCPA) warns that many small business owners do not understand the requirements for issuing 1099s, and they can receive hefty fines and costly IRS audits if not complied with properly.