Shopping Cart
Your Cart is Empty
Quantity:
Subtotal
Taxes
Shipping
Total
There was an error with PayPalClick here to try again
CelebrateThank you for your business!You should be receiving an order confirmation from Paypal shortly.Exit Shopping Cart

  KLSM CPA Firm PLLC 

We want to be your business and tax partner!

Blog

Blog

1099 Filing Reminder

Posted on November 21, 2020 at 2:15 PM

The truth about Form 1099-MISC and 1099-NEC: When to issue and what happens if you don't!

You may have heard the following myths:

  • "I only have a couple 1099's so I don't have to file",
  • "My vendors won't provide info so I can't file" or
  • "If I don't issue a 1099, the IRS will just disallow the deduction if I don't file".

These are myths and simply are not true!

Here are the facts you need to know:

 

Do you need to file a form 1099-MISC and/or a 1099-NEC? Yes, you are required to file, even if you only have one 1099 to file. Please be aware that the rules have changed.

You must file a form 1099-MISC, Miscellaneous Income, when you have have paid for the following items during the year (in the normal course of business):

  • $10 or more in royalties or broker payments in lieu of dividends or tax-exempt interest
  • $600 or more for:
    • Rent
    • Prizes and awards
    • Other income payments
    • Notional principal contract
    • Fishing boat proceeds
    • Medical and health care payments
    • Crop insurance proceeds
    • Certain payments to an attorney
    • Section 409A deferrals
    • Nonqualified deferred compensation

 

Beginning with the 2020 tax year, you must file Form 1099-NEC, Nonemployee Compensation (NEC), for any sole proprietorship/individual, single member LLC, or partnerships you paid at least $600 to perform services in the course of your trade or business, when that person is not your employee, excluding corporations.

In summary, Forms 1099-MISC and 1099-NEC are due on January 31st. Contact KLSM CPA Firm, PLLC if you need assistance with your filing or need information on how to file when a vendor refuses to provide information.

Categories: None

0