As we edge closer to 2025, it’s crucial to start assembling all the essential information required for accurate filing of W-2 and 1099 information return forms. The IRS mandates that any entity — be it a corporation, partnership, individual, estate, or trust — involved in a trade or business and engaged in reportable transactions throughout the calendar year, must file information returns.

These returns serve to report these transactions to the IRS and require providing statements to the other party involved.

Electronic Filing Requirements

In 2023, the IRS began requiring electronic filing for taxpayers who have 10 or more information returns (such as W-2s and 1099s). This requirement is still in effect for the 2024 tax year. The following information return forms must be added together to determine electronic filing requirements:

Form W-2, Form 1099 series, Form 1042-S, the Form 1094 series, Form 1095-B, Form 1095-C, Form 1097-BTC, Form 1098, Form 1098-C, Form 1098-E, Form 1098-Q, Form 1098-T, Form 3921, Form 3922, the Form 5498 series, Form 8027, and Form W-2G.

For example, filing 4 W-2s and 7 1099-NEC forms would total 11 information returns, therefore meeting the requirement to have to file electronically.

1099 Forms

When determining whether to file a 1099, there are a couple of key factors to bear in mind. First, any payment or series of payments totaling over $600 for non-employee services necessitates a 1099. Some common services include contract work, maintenance and repair services, professional services, and rental payments. However, if these services are paid for using a credit card, the responsibility for filing the 1099 rests with the payment processor, not with you.

It’s worth noting that payments made exclusively for purchasing merchandise or inventory items do not need to be reported on a 1099. This covers expenses involving materials and supplies that will become a part of merchandise.

Second, payments to an incorporated entity typically do not mandate a 1099 filing. However, there are two notable exceptions to this guideline. Attorney fees and medical payments, regardless of the entity’s corporate status, require the filing of a 1099.

IRIS

To assist with new filing requirements, the IRS created a free online portal to file the Form 1099 series information returns electronically. Those who typically paper file their 1099 forms may also find this portal useful. The Information Returns Intake System (IRIS), can be utilized to create, upload, edit and view information, and download complete copies of 1099-series forms.

In reference to IRIS, it’s important to note that obtaining a Transmitter Control Code (TCC) is necessary. Please be aware that this process can take up to 45 days, so prompt action is advised. Note that it is not necessary to sign up for a TCC if Ketel Thorstenson is filing your information returns. For more information or to begin the application process, visit: Application For TCC.

If you have any questions regarding the filing requirements for information returns make sure to contact your KT advisor sooner than later!