How To File A 1099 NEC

Did you know that 59 million Americans do freelance work? Nearly 1/3rd of freelancers choose to leave a full-time job to pursue their dreams and be their own boss. They are usually considered independent contractors.

If you are working with an independent contractor, you need to know how to file a 1099 NEC form. Companies that pay more than $600 to non-employees will need to provide a 1099 NEC form. Non-employees include independent contractors and sole proprietors who have provided a service for the company.

Are you interested in learning how to file a 1099 NEC form? You’ve come to the right place. Keep on reading to learn more.

Step 1: Complete The Form

While employees require you to file a W-2 Form, non-employees require you to file a 1099 NEC. Before you file anything, you need to gather the right information.

You need your business name, address, and phone number. You also need the information of your non-employees, including a taxpayer identification number.

Include the total amount of compensation paid and federal income tax withheld, which is usually zero. You usually don’t have to withhold taxes unless they are subject to backup withholding rules.

You will also need to include state-specific information, including any state tax withheld if applicable. A tax calculator is a helpful tool to have and can simplify this process exponentially. Remember that you also have state tax obligations. If you need it, you need to file Copy 1 of the form with a state tax department.

Step 2: File Copy A

Copy A of the 1099-NEC form must be submitted to the IRS by January 31. You can file the form electronically or by mail. You can e-file the form electronically through the IRS Filing a Return Electronically (FIRE) system.

To use the FIRE system, you need to apply for a Transmitter Control Code (TTC). This code allows you access to the FIRE system. Remember that if you have more than 250 1099-NEC forms to file, you are required to file electronically. For this, you can also generate the form through the 1099-NEC maker.

If you choose to file it by mail, you can’t simply print and mail it. The IRS needs a scannable version of Copy A. You need to get a physical copy of the official form, fill it out and then mail it.

Step 3: Distribute Copy B

Copy B of the form must be distributed to the independent contractor by January 31.

Once you get consent from the non-employee, you can email them a copy of Copy B of the 1099-NEC form.

Learn How To File A 1099 NEC Form Easier

You need to file a 1099 NEC form anytime you pay a non-employee compensation including fees, commissions, prizes, and awards. By learning how to file a 1099 NEC form, you can make sure you meet the deadlines and avoid paying penalties for late filing. Make sure to file these forms and distribute them to non-employees by January 31.

Make your life easier by using the 1099 NEC form generator. It’s simple to use and automatically fills out the information required. With the help of this generator, you can create your form in seconds and meet your deadlines with ease.