Farmers and ranchers need to be aware of tax requirements regarding their service providers who are not full-time employees. SDSU Extension Crops Business Management Field Specialist Jack Davis says any employees that make more than $600 will need to be issued a 1099 form so they can pay the appropriate income taxes.
He says the deadline for 1099s to be sent is January 31, so farmers need to keep that in mind when planning their taxes for next year. Davis says 1099s are typically issued to self-employed workers and contractors, and for rent paid to landowners. He says timely filing is critical to avoid any tax penalties.
Davis says if a farmer has questions regarding 1099 forms or taxes in general they should consult with their tax professional. They can also contact SDSU extension at IGrow.org.
If a farmer or rancher receiving services fails to send out 1099 forms in a timely manner, penalties range from $30 to $100 per 1099 for late filings or up to $250 per 1099 for intentional disregard.
