Things to Notice When Filling Out 1099-NEC
1. Confirm They Qualify for a 1099-NEC
- Who Gets a 1099-NEC?
- Paid $600 or more during the year for services.
- They are an independent contractor (not your employee).
- You didn’t pay them via a third-party service like PayPal or Venmo if those services send their own 1099-K.
2. Collect Their Information
- Form W-9:
Before issuing the 1099-NEC, have your helper complete a W-9 form (Request for Taxpayer Identification). You’ll need their:
- Full legal name.
- Address.
- Social Security Number (SSN) or Employer Identification Number (EIN).
(You can download the W-9 for free from the IRS website).
3. Fill Out the 1099-NEC
Use the “kit” you purchased. It should include:
- Copy A: Sent to the IRS.
- Copy B: Sent to the contractor.
- Copy C: For your records.
Important Fields on the 1099-NEC:
- Payer’s Information: Your name, address, and EIN/SSN.
- Recipient’s Information: Their name, address, and EIN/SSN from the W-9.
- Box 1 (Nonemployee Compensation): The total amount you paid them during the year.
4. Send Forms
- To the Contractor: Mail Copy B to your helper by January 31st, 2025.
- To the IRS:
- Send Copy A to the IRS, along with Form 1096 (a summary form) by February 28th, 2025, if filing by mail.
- If filing electronically, the deadline is April 1st, 2025.
Note: Some states also require 1099-NEC filing. Check your state’s requirements.
5. Keep Records
Maintain copies of the W-9, 1099-NEC, and related payment documentation for at least 3 years in case of an audit.
Other Notes
- Filing Electronically: If you’d prefer not to deal with mailing physical forms, you can use services like QuickBooks, Tax1099, or Track1099 to file online. They’ll handle the IRS and contractor copies for a small fee.
- Mistakes: If you make a mistake, you can file a corrected 1099-NEC.