The 1099-NEC form is for businesses who have paid contractors more than $600 for services rendered. This form is filed with the government by January 31st and must be sent to the individual contractor as well as the government. In this blog post, we will break down everything you need to know about the 1099-NEC form.
What is a 1099-NEC Form?
A 1099-NEC form is for businesses who have paid contractors more than $600 for services rendered. This form is filed with the government by January 31st and must be sent to the individual contractor as well as the government.
Why Do We Need to File 1099-NEC?
The IRS uses the 1099-NEC form to track income for individuals who are not employees. This allows the IRS to make sure that these individuals are paying their taxes correctly.
Who Will Need a 1099-NEC?
- Graphic Designer
- Web developer
- Virtual Assistant
Only Individuals, LLCs and partnerships. You do not send to S-Crops, C-Crops and Non-Profits
You will send them 1099-NEC if you paid them via:
- Personal Venmo & PayPal
- Zelle or any bank wire transfer
Who Doesn’t Need 1099-NEC?
Pay them via:
- Credit Card Processor (PayPal Business, Venmo Business, Stripe, Square etc)
How Do You File 1099-NEC?
You will need to collect information from your contractors, calculate how much you paid your contractor, and fill out the 1099 form. Here are more detailed instructions:
1) Collect information from your contractors: You will need their name, address, and Social Security number or taxpayer identification number.
2) Calculate how much you paid your contractor: This includes any money that you paid them as well as any reimbursements that you made on their behalf.
3) Fill out the 1099 form: You can get a copy of the 1099 form from the IRS website or from your local post office. Once you have filled out the form, you will need to send it to both the contractor and the government.
The 1099-NEC form is an important way for businesses to track the income of individuals who are not employees. By understanding what this form is and how to correctly fill it out, you can ensure that your business is in compliance with IRS regulations.