Tag: small business

How To E-File 1099 Forms For Free

If you’re a business owner who’s hired independent contractors for services rendered to your business, you can e-file 1099 forms for free. Through the IRS’s Information Returns Intake System (IRIS), you can file 1099 returns, as well as print recipient copies.

1099 Requirements

If you paid an independent contractor over $600 in a tax year, you’re required to file a 1099-NEC Form with the IRS and issue the independent contractor a copy by January 31st.

As of 2023, if you must file 10 or more 1099 forms in a given tax year, you’re required to e-file them.

IRIS Taxpayer Portal

In order to use the IRIS portal you’ll have to submit an application to receive a Transmitter Control Code. This code will allow you access to the portal.

The application will require your business information and the information of the person submitting the application (also called a Responsible Office). The business must have an EIN, as social security numbers or ITINs are not acceptable.

How to Get an EIN

To get an EIN you’ll have to submit an application, providing your business information and the information of the Responsible Party. The Responsible Party is the person who exercises control over the business, like the owner. Most EINs are issued immediately.

More detailed information is provided in Publication 5717, Information Returns Intake Systems.

Did You Claim The Employee Retention Credit? You Might Receive A Letter From The IRS.

The Employee Retention Credit came about as a result of mandatory shutdowns during the Covid pandemic. It was a credit meant to help businesses who at the time had paid employees, but who were forced to shut down. The ERC covered the periods after March 19, 2020 and before January 1, 2022. For a complete eligibility list go here.  

In December of 2023 the IRS started looking into possible fraudulent claims of the credit. While businesses that claimed the credit without being eligible may face interest and penalty charges, the IRS acknowledges that many businesses claimed the credit as a consequence of “aggressive marketing” by promoters looking to benefit from businesses claiming the credit. As a result, the IRS is allowing businesses to withdraw from claiming the credit if they haven’t received payment or if they’ve received a check but haven’t cashed it yet. If this is your case, you can go here to start the withdrawal process. For those who have received payments, the IRS plans to release a voluntary disclosure program.

At the moment the IRS’s main concern is businesses who claimed the credit, but which did not exist during the eligibility periods, and those that did not have any paid employees. According to the IRS, the number of businesses set to receive disallowance letters is around 20,000.

If you were persuaded to claim the credit but aren’t sure if you were eligible to claim it, review the eligibility list. If you don’t qualify for the credit and haven’t received payment, or if you received a check but haven’t cashed it, consider starting the withdrawal process. The IRS assures claimants that the tax agency will act if the credit was never claimed.