Form’s 1099NEC and 1099MISC
The 1099 form requirements have been simplified below. This is an area of increasing complexity, but it is safe to say that the penalties can quickly add up for not filing or incomplete filing. Since these must be e-filed and in the hands of the recipients by the end of January it is important to gather as much information beforehand as possible. Do not wait till the last minute!
The basic rule is that you must file a 1099-NEC whenever you pay an unincorporated independent contractor for work done for your company. An independent contractor who is a sole proprietor, member of a partnership or LLC and the threshold amount is $600 or more in a calendar year. Normally, payments are made to these individuals in the form of check or direct deposit.
The “general rule” is that business owners must issue a Form 1099-MISC to each person to whom they have paid at least $600 in rents, interest, dividends , prizes and awards, or other income payments.
Not Filing on Time
If you file 1099-NEC between 30 days late and August 1, the penalty could be as range from $50 per 1099 to as high as $110 per form. If you file Form 1099-NECs after August 1 you could be penalized up to $270 per form.
Written by John M Matras CPA
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