Year-End Tax Planning Strategies For Individuals 

Important Forms 1098/1099  *Action Required*

Dear Valued Client,

Every individual or entity engaged in a trade or business must file information returns for each calendar year for certain transactions made during such year in the course of their trade or business. The most common information returns filed are listed below:

  • FORM 1098 - filed when you receive $600 or more in mortgage interest from an individual in the course of a trade or business.

  • FORM 1099-DIV - filed by the payer for each payee that (1) received $10 in dividends or (2) received at least $600 as part of a liquidation.

  • FORM 1099-INT - filed by the payer for each individual to whom payments of $10 or more in interest was paid in the course of a trade or business.

  • FORM 1099-MISC - filed for each individual to whom at least $600 in gross rents and services was paid in the course of a trade or business. For Royalty payments, the threshold is $10 or more. In addition, attorneys’ fees of $600 or more paid in the course of a trade or business for legal services are reportable on Form 1099-MISC.

The Protecting Americans from Tax Hikes (PATH) Act of 2015 accelerated the required filing dates for Form 1099-MISC when reporting nonemployee compensation payments in box 7. Employers must file Forms 1099-MISC that report payments in box 7 with the IRS on or before January 31, 2020 of the year following the calendar year to which the return relates, regardless of whether the forms are filed on paper or electronically. The due dates for filing Forms 1099-MISC that do not report a payment in box 7 remain February 28, 2020, if filing on paper, or March 31, 2020, if filing electronically.

Below is a link to download the 1098/1099 Data Information Form, which needs to be completed and submitted to us for preparation of the Forms 1099. PLEASE FILL OUT ALL THE NECESSARY INFORMATION ON THIS FORM AND RETURN TO RESTIVO MONACELLI BY JANUARY 16, 2020. Remember, the information submitted to us must be legible. Print or type to avoid errors or corrections to the form.

Please be advised that penalties resulting from failure to timely file correct information returns with the IRS could occur. For example, the first-tier penalty could be $50 per return, and the calendar year maximum could be as high as $556,500. For small filers, the calendar year maximum could be $194,500 for the first-tier penalty. The minimum penalty for each failure due to intentional disregard could be $550 per return. The penalties for failure to file information returns to payees could be similarly applied. The failure to file may also subject you to backup withholding requirements for the recipient. The Federal backup withholding rate for 2019 is at 24%.

Beginning with the calendar tax year 2011, the Internal Revenue Service has revised several business tax return forms and schedules (Schedule C, Schedule E, 1120, 1120S, 1065, etc.) to contain questions to be answered that will determine whether a business has met its information return reporting requirements for the tax year. The answers to the questions will provide the IRS with the information as to whether a business is required to file Forms 1099 and whether they are in compliance. In addition, it is very important to secure a completed Form W-9, Request for Taxpayer Identification Number and Certification, for each individual or business that you are required to issue a Form 1099 up front before the first payment is made in order to have the proper information on file.

Once you have downloaded and completed the form below, please fax or email it to Ann McQueeney at amcqueeney@rm-llp.com or fax: 401.421.6799. In order for us to have enough time to prepare your 1099s and return them to you for distribution, please return this form no later than January 16, 2020. If you have any questions, please call Ann at 401.223.2435.

If you would like to discuss how these changes affect your particular situation,
and any strategic planning moves you should consider, please give us a call at

401-273-7600.