Master Form 1099-NEC Reporting with Four Tips from PayrollOrg

SAN ANTONIO , Jan. 30, 2025 /PRNewswire/ -- All organizations that hired independent contractors in 2024 must file Forms 1099-NEC, Nonemployee Compensation, by January 31 to avoid costly penalties. Follow these four Form 1099-NEC preparation tips from PayrollOrg to ensure accurate tax reporting for 2024.

1. Electronic Filing Threshold. Organizations filing 10 or more information returns (e.g., 1099-NEC, 1099-MISC, W-2) are required to file them electronically. For the Form 1099-NEC, organizations can use the Information Returns Intake System (IRIS) Taxpayer Portal for electronic filing of up to 100 returns at a time. Alternatively, if using third-party software or services, the IRIS Application to Application (A2A) interface can be used to e-file thousands of returns simultaneously.
2. Reporting Threshold. Generally, organizations must file a Form 1099-NEC for each independent contractor hired in 2024 to whom they paid at least $600.
3. Penalties for Non-Compliance. Businesses that do not file or provide copies to recipients on time or report incorrect information may face substantial penalties. These penalties can range from $60 to $330 per form, depending on the nature of the mistake and how late the form is filed. If the failure is due to intentional disregard the penalty increases to at least $660 per form.
4. Deadlines Matter. You have until January 31, 2025, to file Form 1099-NEC and provide a copy to recipients. Adhering to this deadline is crucial to avoid the penalties mentioned above.

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

SOURCE PayrollOrg