Know Which 2020 IRS Shape to Use if You Paid Unbiased Contractors?

0
82


Starting with the 2020 tax yr, Shape 1099-NEC will exchange Shape 1099-MISC field 7 for reporting non-employee reimbursement, which contains bills to ICs.

Be Transparent on When to Use Shape 1099-NEC

To place it merely, the brand new 1099-NEC plays the very same serve as as 1099-MISC field 7. It captures bills of $600 or extra to provider suppliers which might be both sole proprietors or participants of a partnership. Relying at the wishes of your corporation, you’ll have applied any collection of impartial contractors, similar to:

  • Graphic designers
  • Internet builders
  • Cleansing pros
  • Freelance writers
  • Landscapers
  • And different self-employed folks

For those and different ICs, you should distribute the 1099-NEC to recipients through February 1, 2021 (since January 31 falls on a Sunday). This may be the date you should report those paperwork with the IRS – whether or not you might be submitting by means of paper or electronically.

What About Shape 1099-MISC?

Since you’ll now not use a 1099-MISC to document impartial contractor bills, you could wonder whether this type serves any goal. The 1099-MISC stays, however in a unique capability. Typically talking, you will have to report a Shape 1099-MISC for someone you paid no less than $10 in royalties or $600 in hire, prizes and awards within the earlier yr.

Tricks to Ease the Tax-Submitting Procedure

That can assist you together with your upcoming submitting, believe those do’s and don’ts:

  • DO make sure to have a Shape W-Nine on report for every contractor sooner than finishing Shape 1099-NEC.
  • DO check that the taxpayer ID is right kind for every impartial contractor.
  • DON’T use Shape 1099-NEC to document non-public bills.
  • DON’T use Shape 1099-NEC to document worker wages (use the W-2 as an alternative).

Perception and Skilled On-line Submitting

Need to be told extra in regards to the variations between the brand new 1099-NEC and the 1099-MISC? Take a look at the main points right here. And while you’re in a position to report your 1099s this tax season, flip to efile4Biz for an efficient, reasonably priced resolution. It’s unfastened to check out!

By means of Jaime Lizotte, Tax & HR Compliance Answers Supervisor, ComplyRight

Symbol: Depositphotos.com






Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here