Preparing Your Tax Return(s) and Information Returns

Information Returns

Checklist for Information Returns

If you make or receive payments in your business, you may have to report them to the IRS on information returns. The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. You must give a copy of each information return you are required to file to the recipient or payer. In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. For more details on information returns and when you have to file them, see the Instructions for Forms 1099, 1098, 5498, and W-2G

Form 1099-MISC. Use Form 1099MISC, Miscellaneous Income, to report certain payments you make in your trade or business. These payments include:

• Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants, or directors.
• Rent payments of $600 or more, other than rents paid to real estate agents.
• Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows.
• Royalty payments of $10 or more.
• Payments to certain crew members by operators of fishing boats.

You also use Form 1099-MISC to report sales by you of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment.

Form 1096. Use Form 1096 to Send Forms to the IRS. You must send Copies A of all paper Forms 1099, 1098, 5498, and W-2G to the IRS with Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Instructions for completing Form 1096 are contained on Form 1096.

Form 8300. You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. Cash includes U.S. and foreign coin and currency. It also includes certain monetary instruments such as certain cashier's and traveler's checks and money orders. For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business).

Form W-2.  You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes, and advance earned income credit (EIC) payments. For more information on what to report on Form W-2, see the Instructions for Form W-2.

Important References

Publication 334                 Tax Guide for Small Business
Form 1099 MISC              Miscellaneous Income
Form 1096                         Transmittal for 1099
Form 8300                         Report of Cash Payments Over $10,000 Received in a Trade or Business
Form W-2                           Wage and Tax Statement
Instructions for Form W-2
Publication 583                 Starting a Business and Keeping Records
Publication 1544               Reporting Cash Payments of Over $10,000