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    The 1099-NEC and 1099-MISC Explained

    [fa icon="clock-o"] Jan 19, 2021 9:45:00 AM [fa icon="user"] Cheryl Coyle [fa icon="folder-open'] Financial Management, Bookkeeping, Accounting

    tax deadlines

    For several decades non-employee employee compensation was reported using a 1099-MISC. The IRS has changed that for the 2020 tax filing year and is requiring those wages to be reported on a 1099-NEC.


    File 1099-MISC forms for:

    • Royalties or broker payments in lieu of dividends of tax-exempt interest of $10 or more
    • Rents
    • Prizes or awards
    • Cash from a notional principal contract to an individual, partnership, or an estate
    • Any fishing boat proceeds
    • Medical and health care payments
    • Crop insurance proceeds
    • Payments to an attorney
    • Section 409A deferrals
    • Nonqualified deferred compensation

    File 1099-NEC for:

    • Independent contractor with income of at least $600 during the year

    1099 Deadlines for 2020

    Form

    1099 Due Date to Recipients

    Filing to IRS By Mail

    E-Filing to IRS

    1099-NEC

    February 1, 2021

    February 1, 2021

    February 1, 2021

    1099-MISC (no data in boxes 8 or 10)

    February 1, 2021

    March 1, 2021

    March 31, 2021

    1099-MISC (with data in boxes 8 or 10)

    February 16, 2021

    March 1, 2021

    March 31, 2021

    1099-B & 1099-SINT

    February 16, 2021

    March 1, 2021

    March 31, 2021

    1099-INT, 1099-DIV, 1099-R

    February 1, 2021

    March 1, 2021

    March 31, 2021

     

    Make Your Life Easier Next Year

    Below is a quick list you can start to implement now to help relieve some stress regarding 1099s:

    1. Have a Solid Bookkeeping System – Make sure you have a good set of books to help track expenses and vendor payments. This is something that will not only help with 1099s and tax season, but it can help you better manage and grow your business throughout the year.

    2. Always Collect a W9 Up Front– Whenever you are paying an outside vendor, regardless of the amount, ask them for a W9. You can then store this on file so it is ready come January. Many businesses don’t expect to pay someone $600 but after doing a job here and a job there, at the end of the year they pass the $600 mark and forgot to initially grab a W9.

    3. Start Early – Don’t wait until the end of January to begin processing 1099s. The earlier the better.

    Need help? We do 1099s for our clients. Contact us to see how we can help you.  

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    Cheryl Coyle

    Written by Cheryl Coyle

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