Churches should note upcoming February 29 deadline.
Form 1099s are due on February 29, 2012, for the 2011 tax year, and churches that need to issue these forms should take note this year: a failure to send them on time has doubled from $50 per form to $100 per form.
If you do not have all the information needed to complete a Form 1099 (such as a Social Security number), you can still file it incomplete by February 29. As long as you secure the missing information and file the amended Form 1099 before August 1, 2012, then no penalties will apply. By the way, if you file the Form 1099 within 30 days after February 29, the $100 penalty is reduced to $30. If you file Form 1099 more than 30 days after February 29, but before August 1, 2012, the penalty is reduced to $60 per form.
The IRS projects collecting big bucks from these penalties over the next few years. Churches should check—and double check—to make certain Form 1099s are issued to all unincorporated businesses that provided services of $600 or more to them during 2011. This includes sole proprietorships, partnerships, and limited liability corporations (LLCs). You can verify the business information via a Form W-9.
Following is a short list of individuals and companies that must receive a 1099-Misc from your church if you do any business with them of $600 or more.
1. Landlords
2. Guest speakers, musicians, nursery workers and babysitters
3. Coffee vendors such as Starbucks, Caribou and others
4. Landscapers and lawn care providers
5. Doctors and hospitals, chiropractors
6. Lawyers
7. Cleaning/Janitorial companies
8. Video companies
9. StartCHURCH, for the services we provide
10. Copier maintenance agreements
