As year-end approaches, getting prepared is crucial for avoiding late or non-filings.
1. What the 1099-NEC Is:
This form reports payments made to nonemployees—like contractors, freelancers, or vendors—who’ve been paid $600 or more for services during the year. No need to file if a contractor earned less.
2. Who Should Receive One:
Any contractor that you PAID $600+ in the calendar year, for business services and who is not on your payroll (meaning they didn’t receive a W-2).
3. Who Should Not Receive One:
You don’t need to send a 1099-NEC to corporations (except attorneys), or for non-business expenses, or employees already reported on a W-2.
4. The Importance of Form W-9:
Before paying any contractor, you should collect a Form W-9. It provides their legal name, address, and taxpayer identification number (TIN)—all required to complete their 1099-NEC accurately.
5. Filing Deadlines:
Both the IRS and your recipients must receive their copies by January 31.
6. Electronic Filing Is Easier:
Electronic filing through your bookkeeper or accounting software saves time, reduces errors, and provides confirmation of receipt.
If you're looking for professional, respectful and non-judgmental support, you can call Better Bookkeepers Inc at 832-299-6712