Which 1099 form do I need for subcontractors?

Which 1099 form do I need for subcontractors?

Tip. Companies ask subcontractors to complete form W-9, which includes the worker’s name, tax ID number and other information needed when the employer fills out form 1099-NEC. The employer sends form 1099-NEC to the subcontractor and the IRS.

Do I have to issue a 1099 to a subcontractor?

You give a Form 1099 to a subcontractor showing the amounts you paid him. The subcontractor is responsible for keeping his or her own records and paying his or her own income and self-employment taxes. It is important to note that either classification-employee or subcontractor-can be valid.

What is the IRS form for subcontractors?

Form 1099-MISC is an information return, providing both the contractor or subcontractor and the IRS with taxable income information.

Do subcontractors get a 1099-NEC?

If you paid someone who is not your employee, such as a subcontractor, attorney or accountant $600 or more for services provided during the year, a Form 1099-NEC needs to be completed, and a copy of 1099-NEC must be provided to the independent contractor by January 31 of the year following payment.

What is the difference between 1099-MISC and 1099-NEC for 2020?

The 1099-NEC is now used to report independent contractor income. But the 1099-MISC form is still around, it’s just used to report miscellaneous income such as rent or payments to an attorney. Although the 1099-MISC is still in use, contractor payments made in 2020 and beyond will be reported on the form 1099-NEC.

What happens if you file 1099-MISC instead of 1099-NEC?

If I received a 1099-misc instead of a 1099-nec, does that have to be corrected? No difference if you enter the 1099NEC or just enter it all as Cash or General. Only the total of 1099NEC & cash goes to Schedule C line 1. Doesn’t matter how you enter it as long as the total is the same or more than the 1099NECs you got.

Does 1099-NEC replace 1099-MISC?

Form 1099-NEC, Nonemployee Compensation, is a form business owners use to report nonemployee compensation. Only use this form to report nonemployee compensation to independent contractors. Do not report other types of payments. Form 1099-NEC did not replace Form 1099-MISC.

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