1099 help for my nonprofit group

April 27, 2009 10:21 AM

My nonprofit did not send out 1099s. Now what?

I am the treasurer for a small club-like nonprofit. In 2008 we started paying someone to do small tasks like setting up our meeting hall, arranging food service, etc. Her pay came out to about $1000 for the year. As this was our very first paid individual in the history of the organization, I did not send out a 1099 to her, or collect her tax data, simply because it did not cross my mind. She has not requested it either. I'm thinking that I made a big mistake here, and I don't have a lot of accounting background (I'm kind of the de-facto treasurer). What should I do now that all of the deadlines have passed? I desperately want to get everything above board, as the IRS makes me itchy.

posted by anonymous to work & money (6 comments total)

IANAL, but the company I have done contract work for said they weren't required to send me a 1099.
posted by Fleebnork at 10:55 AM on April 27

There is an amount, something like 650 dollars, that you can pay someone in a year without
having to issue a 1099. Your sin is not great, and the penalties are small, and it looks like
you have time to fix it, according to this:

http://www.smbiz.com/sbspec123.html

I have the same response when I deal with the IRS. Action erases fear.
posted by the Real Dan at 11:01 AM on April 27 [1 favorite]

You need to send one if you paid over $600 to that person. Do it now, you may have to pay a $50 penalty. Not too big a deal.
posted by itsamonkeytree at 12:32 PM on April 27

And please let your worker know that you are doing this.
posted by TWinbrook8 at 12:37 PM on April 27

$1000 paid to an individual?

They really are pretty unlikely to find out unless you were to be audited due to other reasons.
posted by floam at 2:13 PM on April 27

I'm not a tax expert nor an accountant. I, however, am on the receiving end of income such as what you describe.

It is likely you will need to issue this person a 1099-MISC for the amount paid. $600 is the threshold for reporting, so you're well over that amount.

Here's an e-how guide but frankly, because April 15th is past, it is probably best to get advice directly from the IRS. Don't be intimidated by our ingrained cultural fear of the IRS. They are there to help you in situations like this, especially if you take the initiative and are upfront that you made a mistake in not issuing this. As Treasurer, you're legally responsible to do your job accurately and conform to the tax code.

The IRS says:

Need help? If you have questions about reporting
on Form 1099-MISC, call the information reporting
customer service site toll free at 1-866-455-7438
or 304-263-8700 (not toll free). For TTY/TDD
equipment, call 304-267-3367 (not toll free).
posted by kuppajava at 5:56 PM on April 27