ARE YOU READY FOR THE NEW FORM 1099-NEC ONLINE?
With the end of the Tax year approaching, now is a good time to be sure you have everything you need to complete your tax year-end filing need. Key documents, such as the 1099-MISC Form Online and the new Form 1099-NEC Online, want to be submitted to receivers by February 1, 2022.
The newly form the IRS has introduced, 1099-NEC Online Filing, will be used to report nonemployee compensation for 2021. Prior to 2020, Form 1099-MISC, box 7, was used to report nonemployee compensation.
Forms 1099-MISC and 1099-NEC are wanted to be filed only if the payments are made in the course of business. For example, if you are freelancer who pays online $1,500 for work on your home, you are not needed to file a form 1099-NEC or 1099-MISC. However, if you pay online $1,500 for work at your office, you are required to file the applicable form.
If you file 1099-NEC Online Filing, you do not also have to file a 1099-MISC Online Filing for the same payment.
Failure to correction file forms 1099-NEC and 1099-MISC could lead to costly penalties. The 1099-NEC must be filed with the IRS by February 1, 2022, and the 1099-MISC must be filed with the IRS by March 1, 2022.
1099-NEC Form Online
Starting with tax year 2021, employers need use 1099-NEC Online Filing to report nonemployee compensation. If the following four conditions are met, you generally must report a payment as nonemployee compensation:
You made the payment to someone who is not your employee.
You made the payment for services rendered in the course of your trade or business (including government agencies and non-profit organizations).
You made the payment to an individual, a partnership, an estate or, in some cases, a corporation.
You made payments to the payee of at least $600 current the year.
1099-MISC Form Online
1099-MISC Form Online is still around. Filing is required for payments of more than $600 in the course of your business for rents, prizes and rewards, gross proceeds paid to an attorney, fishing boat proceeds, medical and healthcare payments, and other type payments. You are wanted to use Form 1099-MISC E-File for gross proceeds paid to lawyers (use Form 1099-NEC for lawyer fees.)
Check Out : What is Form 1099-NEC?
