1099-NEC vs.1099-MISC – what form is right for you?
Here are some things to consider when choosing the right form for your 1099 filings:
1099-NEC form report payments of more than $600 to non-employed individuals (including independent contractors and freelancers); formerly reported on 1099-MISCs, Box 7.
- By February 1, 2022, 1099-NEC copies A and B must be submitted to the IRS and to recipients, either by mail or electronically.
- Make sure you are familiar with the independent contractor’s business form. The fact that an independent contractor’s business card says “company” does not mean the IC is a corporation.
- Always request a W-9 from an independent contractor if you are not sure of their business form. If there is any doubt about whether to send 1099, send it anyway just in case.
A 1099-MISC form is used to report a variety of distributions to individuals, including rent, prizes, and awards.
You must file a 1099-MISC for any nonemployee to whom your firm paid at least $600 during the year for:
- rent
- prizes and awards, or trips
- other income payments
- medical/health care payments
- payments for legal services
- dividends of $10 or more for the year
Copy A, If sending through the mail, it is due by Feb. 28, 2022. If filing electronically it is due by Mar. 31, 2022.
Copy B, whether filed electronically or by mail is due to recipients by Feb. 1
If $600 or more is paid to attorneys, it is due by Feb. 15.
To avoid penalties, 1099s must be filed on time and correctly. Get started soon so that you don’t file the wrong form or the right form with errors. Or better yet, reach out to Halsey Resources. Our bookkeeping can make sending 1099s a simple task each year.
