Dear Clients and Partners,
Just want to share with you some tax-related matters for your information, this is about 1099-NEC and 1099-MISC.
What are these forms?
Form 1099-MISC (Miscellaneous Information) or Form 1099-NEC (Nonemployee Compensation) to:
- Report payments made of at least $600 in the course of a trade or business to a person who’s not an employee for services (Form 1099-NEC).
-simply put these are contractors, project-based or self-employed individuals
- Report payments of $10 or more made in the course of a trade or business in gross royalties or payments of $600 or more made in the course of a trade or business in rents or for other specified purposes (Form 1099-MISC).
-examples are rent paid for the year and fees to attorneys
- Report payment information to the IRS and the person or business that received the payment.
Note that these are for US-based contractors and payees only, if you are outsourcing from anywhere in the world other than the US then you don’t have to file or send out these forms.
Let us know if you have paid these kinds of payees, so that we can generate reports for you that you can use for your business or send to your accountant.
Deadlines for submission to IRS:
- 1099-NEC, January 31 either by e-file or by mail
- 1099-Misc, March 1 if filed by paper and March 31 if filed electronically
For your US-based employees, you need to fill out Form W-2 and submit to SSA, IRS and employees on or before January 31.
Hope this information will be helpful. Thank you!
All the best,
Melchie
