Recent Posts:Filing Forms 1099 NEC & MISC for Tax Year 2020Filing Forms 1099 NEC & MISC for Tax Year 2020 Each year the IRS requires that certain payments are reported on Forms 1099. Failure to file, improper reporting and/or late filing will subject your company to penalties which range from $50 to $100 per form. The penalties will also increase with time. In addition, we have noted that the IRS has recently increased their scrutiny of this area of tax reporting. This year the rules have changed resulting in both the traditional 1099-MISC and a new form called 1099 NEC. Forms 1099-NEC must be issued to a noncorporate entity if payments to that entity were $600 or more for services rendered. If the following four conditions are met, you must generally report a payment as nonemployee compensation:
Common examples of nonemployee compensation include payments to independent contractors, fees paid for professional services such as of attorneys and accountants, and commissions paid to nonemployee salespersons that are subject to repayment but not repaid during the calendar year. 1099-MISC forms need to be filed to each person to whom you have paid the following in the course of your business during the year:
The amount to be reported on form 1099 is only for payments made via cash or check. Any payments made via Credit Card, Paypal or other 3rd parties should NOT be included on form 1099. Those entities will issue their own 1099-K to the entity. A noncorporate entity is an individual sole proprietor, partnership or limited liability company (LLC). Forms 1099-NEC and 1099-MISC are not issued for the purchase of products. Forms 1099-NEC & 1099-MISC are due to the recipient no later than January 31, 2021. If you have any questions or need assistance, please contact us.
Amy Leonardi | 01/06/2021
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