December 5, 2023

Do I Need to File Form 1099-MISC or 1099-NEC?

I paid someone in the course of my trade or business this year! Do I need to file form 1099-MISC or 1099-NEC? Well it depends. While there are several 1099 forms, this article will focus on 1099-MISC and 1099-NEC.

Solving The Mystery Behind Form 1099-MISC and 1099-NEC:

The good news is that we are here to help you understand the difference between the two forms and why you even need to file the form in the first place! Form 1099 is an informational form that reports certain payments made to other people. It’s so the IRS can verify that the income one person is (or is not) reporting matches what another person reported they paid out.

Form 1099-MISC is used to report miscellaneous information including:
• Any amount over $0 if you withheld any federal income tax
• At least $10 paid in royalties or broker payments
• At least $600 paid in:
○ Rents
○ Prizes and Awards
○ Medical and Health Care Payments
○ Gross Proceed to Attorney
○ And More!
Form 1099-NEC is used to report non-employee compensation including:
• Any amount over $0 if you withheld any federal income tax
• At least $600 in payments for services performed by someone who is not your employee
• At least $600 in payments to an attorney

I Need to File, Now What?

In order to avoid penalties, you will want to file the form(s) with the IRS and possibly your state by the deadline. Each state has their own filing requirements and you will need to check with your state to determine their filing requirements.

• IRS Deadline to file for 2023 1099-MISC: February 28th, 2024 if filing by paper or by March 31, 2024 for e-file.
• IRS Deadline to file for 2023 1099-NEC: January 31, 2024.

There are options online that charge a fee to make the forms on their program and will e-file for you. You can also manually fill out the forms and mail them to the proper parties.

Want more in-depth information? See the article below:
fortitude-form_1099misc_and_form_1099nec_reporting_2023 (1) (1)

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Melissa Calwell

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