NEW TAX DATE & 1099 FAQ
NEW tax date &
Q: So when are taxes due?
Tuesday, April 17, 2018
The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation. You can read more about this here.
Q: As a freelancer, what should you do to help make sure you get your 1099s?
A: The best thing to do when you work with anyone that will potentially pay you over $600, is send them a W-9 right away. This way, they have your info and aren't scrambling once the start of the year comes to report on their 1099 totals.
If possible, you can also tell them the total 2017 payments you received. If you use something like Harvest for invoices, it's easy to export.
Q: What's a W-9 and 1099?
A: W-9 is used to collect the information of a person or business that you have worked with and are planning to pay over $600. You can download it here and email it to the business/person that paid you. You can use a tool like Hello Sign to fill out the PDF and email/download it.
The 1099 is the form you use to report on money you've paid out to specific business or person after the previous year ends for government and tax record. People or businesses who have been issued 1099s will be taxed on the amount that was reported. You should only receive a 1099-MISC from a person/business if they have paid you over $600 in non-electronic payments (see the next question).
Q: What if I paid someone or have been paid electronically?
A: If you have made payments to anyone (person or business) electronically through a processor such as Stripe, PayPal, Square or online platforms like Lyft and Airbnb, you might not need to report their payments as 1099-MISC.
It is up to the electronic payment processor to report payments made to the government as a 1099-K if you meet both of the following criteria:
- More than $20,000 in gross sales from goods or services in the calendar year
- AND more than 200 transactions in the calendar year
However, if your tax reporting information is associated with Massachusetts or Vermont, they are required to issue a Form 1099-K and report to your state when you process $600 or more in credit card payments.
For Venmo, you will need to report this as a 1099-MISC as Venmo does not consider itself a payment settlement entity (PSE). Read more about this here.
Q: What happens if you don't receive a 1099 by January 31? Or rather, when should you receive them?
A: 1099s are issued by January 31. If you don't receive a 1099, you should reach out to the person or business that issued your payments to confirm they will be issuing you a 1099.
Also, make sure to check your electronic payment platforms like Paypal, Stripe, Square, and any other place you collect electronic payments. There should be a 1099-K waiting for you unless you do not meet both criteria (see previous question).
Q: What happens if you don't send out your 1099s by January 31?
A: Late filing of 1099s can bring penalties ranging from $30-$100/1099 if not filed on time. If within 30 days late - $50/1099 penalty. If filed more than 30 days - $100/1099 penalty. If filed after August - $260/1099 penalty.
Q: Do you have any recommendations for tax folks?
A: Yes! My friend Ilene (who is also a creative), runs Squires Tax Preparation, and works primarily with freelancers. If you reach out to her, please tell her I sent you!