Let’s discuss filing 1099s for your business or RECEIVING 1099s for work done.
For Businesses Filing 1099s
Here are the three criteria you need to meet to give someone a 1099-NEC:
◼️ You made the payment to someone who is not your employee (including parts and materials).
◼️ You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
◼️ You made payments to the payee of at least $600 during the year.
All 1099-NEC forms must be distributed to the recipients and filed with the IRS by Feb. 1 of the following year.
Who requires a Form 1099-MISC?
If your business paid an individual or LLC at least $600 during the year in rent paid, legal settlements, or prize or award winnings, you are required to file a 1099-MISC.
For Individuals Receiving 1099s
This year, many have picked up side jobs, gig jobs, sales jobs, or temp work. As a result, you may have income from new sources and will receive Form 1099-NEC, Nonemployee Compensation, and file a Schedule C for the first time.
If you are an independent contractor or self-employed you should receive a Form 1099-NEC from each business client that pays you at least $600 during the tax year. When you prepare your tax return, the IRS requires you to report all of this income and pay income tax on it. You are still required to report all of your income even if you do not receive a 1099-NEC.
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