Since we’re now on a new year, this post will talk about a form that comes up at the start of every year. Yes, it’s those pesky Form 1099s. This is very important for you if you are a business owner, a self-employed person, or a freelancer. Also, this is essential if you have paid someone to do something for your business, whether it’s a virtual assistant or a web designer, to name a few. If you’ve paid a contractor in the past year for your business, this post is definitely for you. 

Inside the video

In the video above, I discussed in detail what a Form 1099-NEC is, who needs to file it, and how to file 1099s. Here’s an outline for your reference: 

• What’s a 1099-NEC? 
• Who Should NOT Get a Form 1099-NEC? 
• Exceptions to Filing Form 1099-NEC 
• Filing a Form 1099-NEC (Step #1) – Gather necessary information (Form W-9)
• Filing a Form 1099-NEC (Step #2) – Submit Copy A to the IRS
  • Submit electronically or via mail
  • Due January 31, 2021
  • If filing by mail, you must obtain a physical form (this can be challenging)
  • Must include Form 1096 if you file a physical copy with the IRS 
  • Must file electronically if submitting 250 or more forms (penalty of up to $100 per form if you are required to file electronically and file by paper instead) 
• Filing Form 1099-NEC (Step #3) – Submit Copy B to the Independent Contractor
  • Must be sent by January 31, 2021
  • You can use the version on the IRS website 
  • Can email but need their consent first (very stringent rules)
• Filing Form 1099-NEC (Step #4) – Check if you have state filing requirements 
  • There is a Combined Federal State Filing Program but the 1099-NEC is not yet part of it
  • You may have filing requirements in the state where you do business, the state where your contractor resides and the state where the services were performed 
  • Look up each state’s requirements here: https://www.tax1099.com/1099-state-filing-requirements 
• Filing Form 1099-NEC (The Easier Way!) – Use a service that prepares & files for you:
  • Tax1099.com
  • Gusto or your payroll provider 
  • QuickBooks or your accounting provider

Watch the video now to find out more about how to file 1099s! Check out this post about getting your finances prepared if you want to learn how to get ahead of tax season 2021.