Form 1099-NEC is for business owners who use freelancers and independent contractors.
The IRS has unveiled a new form. Yay!
Actually, Form 1099-NEC has already existed but was discontinued in 1982.
The IRS is simply bringing it back.
I know this feels overwhelming, but that’s why you’re reading this.
Form 1099-NEC, Nonemployee Compensation
For business owners who are familiar with Form 1099-MISC, this resurrected form will not be much different. Form 1099-NEC will replace the nonemployee compensation section of Form 1099-MISC.
The revised form is specifically for businesses to report compensation payments for non-employees such as independent contractors, freelancers and gig workers.
The nonemployee compensation form will begin use again in 2021 for the 2020 tax year.
So what! Who cares about all this?
Business owners who use freelancers, independent contractors and gig workers must use the form when reporting payments for those workers.
Freelancers, independent contractors and gig workers should also look out for the form for their own reporting.
If all this still feels overwhelming, don’t worry. We have you covered.
With year-end tax planning coming up, now is the perfect time to get a head start and clarify all this information.
Click here for a no-obligation tax planning session to discuss your situation and answer any questions you might have.
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