Here are the procedures for reporting 1099-MISC payments in Wisconsin. The Wisconsin Department of Revenue provides Publication 117 to show you which forms they want, and to what address you mail the forms and the due dates by type of form filed: http://www.revenue.wi.gov/pubs/pb117.pdf It is not exactly clear what they want, however, I have it in an email (dated January 30, 2012) that if you file your 2011 Form 1099-MISC’s with the IRS, you don’t have to file them with Wisconsin, unless you are remitting Wisconsin withholding with the forms to the Wisconsin Department of Revenue.
All 1099 forms are required to be printed on “red” forms for the Internal Revenue Service, and be accompanied by a summary transmittal Form 1096, also printed in red. The IRS requires its copy by February 28th.
Payee/recipient copies are supposed to be in the hands of the payees by January 31st.
In order to prepare the forms, you need each payee’s name, address and taxpayer identification number. The IRS provides form W-9 on which this information can be collected from each payee. I strongly suggest before making any payments throughout the year to unincorporated payees for services or rents of $600 or more, that you obtain a completed W-9. http://www.irs.gov/pub/irs-pdf/fw9.pdf?portlet=103
The W-9 instructions explain which taxpayer identification number is used for the various forms of business entities. The most confusing is the single member LLC. This kind of entity, when a single member “look thru” entity, is treated and reported as a sole proprietorship on the Form W-9, if the LLC is not incorporated. Read the instructions carefully! If the LLC is treated as a sole proprietorship, you will need to use the Social Security Number of the LLC owner. You will not use the LLC number! The reason for this “glitch” is that the sole member LLC does not file a tax return separate from its owner, and therefore, the payments made to a sole member LLC in the LLC’s identity are not traceable for the IRS taxpayer identification number matching program.
Page 16 on this link to the IRS instructions provides a handy table of the types of payments and dollar thresholds for reporting 1099-MISC payments: http://www.irs.gov/pub/irs-pdf/i1099gi_11.pdf
The biggest question I get asked is what to do when total payments to an unincorporated service vendor include payments for merchandise along with the services provided. Considering the penalties now in effect for filing an incorrect 1099-MISC, I’d rather err on the side of caution and report the full payment. In the IRS instructions specific to the 1099-MISC for “nonemployee compensation”, the IRS provides a repair example, saying that the parts are incidental to the repair service, and therefore reportable. Look at the top right of page 6 on the instructions: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
To save cost when purchasing forms, you can photocopy the red printed copies for the recipient. In that way, you only need purchase the “red” forms. QuickBooks does not print the form pages; it only prints the data that goes on the Forms 1099 that you need to purchase.
To sum up, you will need to produce:
Form 1096 red transmittal cover form with each group of 1099-MISC to the IRS
Form 1099′s to the individual payees (recipient copy) by January 31st
Keep a copy for yourself, and note the dates mailed. With the penalties at $500,000 now for failure to file, you need to take this seriously.
Note for owners of rental properties: Remember that the rule to report 1099-MISC payments was repealed for you. Per the IRS instructions for 2011 reporting, “The requirement described in the 2011 instructions for persons receiving rental income from real estate to report payments for certain rental property expenses on Form 1099-MISC was repealed by Congress. You do not have to report those payments on Form 1099-MISC.”
