Ensure Correct Tax Reporting with Five Form 1099 Tips from PayrollOrg

SAN ANTONIO, Jan. 31, 2024 /PRNewswire/ -- Any organization that hired an independent contractor in 2023 has until January 31 to file Form 1099-NEC, Nonemployee Compensation, with the IRS or face penalties. Last year, the IRS announced the new Information Returns Intake System (IRIS), a filing platform that allows Forms 1099 to be filed online. Follow these tips from PayrollOrg to help make your 1099 filing process a breeze.

1. Electronic Filing Threshold Lowered. Organizations required to file 10 or more information returns in a calendar year, including Forms 1099, are now required to file them all electronically. This lower threshold is effective for returns required to be filed on or after January 1, 2024. Previously, the electronic filing threshold was 250 information returns, and the threshold applied to each type of information return separately, rather than in the aggregate.

2. All Non-Corporate Service Providers Must Receive Form 1099-NEC. Every service provider you paid at least $600 for services during 2023 must receive a Form 1099-NEC by January 31, 2024.

If the service provider is a corporation, you generally do not have to provide Form 1099-NEC. Note that owners must provide Form 1099-NEC for attorneys' fees and for payments to corporations for legal services. To report payments to an attorney on Form 1099-NEC, you must obtain the attorney's taxpayer identification number (TIN) by having them complete IRS Form W-9, Request for Taxpayer Identification Number and Certification.

3. Online Fillable Copies to Send to Recipients. To help organizations meet their requirement to provide copies of Forms 1099-NEC and 1099-MISC to recipients, the IRS has made online fillable Copies B, 1, and 2 available in a PDF format. Organizations can complete these copies online, then print the copies to furnish them to recipients and to retain copies for their files.

4. Put Your Credit Card to Work. Form 1099-NEC is not required if you paid a contractor with a debit, credit, or gift card. Instead, the bank or credit card company will do the work for you by sending the Form 1099-K to your contractors.

5. Deadlines Matter. You have until January 31, 2024, to file Form 1099-NEC on paper or electronically.

For additional tips and resources, visit www.payroll.org. PayrollOrg is the leader in payroll education.

SOURCE PayrollOrg