Tax period is here and the IRS is realising a new Form 1099-NEC Online for the 2021 tax year. Here is everything you want to know about the IRS necessities for your business.
What is Form 1099-NEC?
1099-NEC standpoints for nonemployee compensation. Form 1099-NEC agrees employers to report payments made to nonemployees or independent contractors. Employers need to file this form with the IRS and send copies to all of their recipients by Febraury 1, 2022.
Reason back to any renovations you made, jobs you hired out, or other services you had performed. So maybe you hired an independent contractor–do you need to file Form 1099-NEC and send them a copy? Odds are, you do. If you paid a nonemployee $600 or more in the 2021 tax year, this form is for you.
Is This A New Form?
Yes and no. The 1099-NEC Form is an old form, but it was last used in 1982. The IRS is bringing this form back to make simpler things.
Before, employers could use Form 1099-MISC to report nonemployee compensation.
Due to tax law, the 1099-MISC became an unsuccessful document. Without going too far into the clears concerning legislature, different units of the form were due at different times, and the IRS had to make modifications.
Getting back the 1099-NEC was the best clarification. Instead of having to submit the 1099-MISC double at two different times—and possibly creating errors due to duplicate forms, employers like you will have to use one form or the other.
Which Form Do I Use?
If you paid a nonemployee $600 or more, you will want to file a Form 1099-NEC Filing. This amount can comprise fees, commissions, bonuses, and smooth benefits.
If you answer “yes” to all the following four questions, you will need to file a 1099-NEC:
Did you pay a nonemployee or independent contractor?
Was the payment $600 or more?
Was this payment made for services you received on behalf of your business?
Was this payment made to either a person, partnership, estate, or corporation?
There are two fast caveats we want to go over. Even if you didn’t answer in the assenting to all the above questions, you might still need to file a 1099-NEC. If you paid at least $10 in royalties OR suspended any federal income tax as part of the backup suppression rules, then you will also have to file a 1099-NEC.
E-File Form 1099-NEC Easily with TaxSeer
E-Filing the Form 1099-NEC can be as easy & fast. Overlooking to keep track of your payments is one thing that can complicate your Online Filing method and reason main headaches for your business. To make it easy, document every payment you make in the form of TaxSeer. At the last of the year, you’ll have all those payments on the record and be able to file Form 1099-NEC Online with TaxSeer.
TaxSeer is proud to be the first Online Filing generator to offer e-filing. This solution also supports Form W-2 Online and Form 1099-MISC Online for 2022 tax year