If you are familiar with sending out 1099 tax forms for your business, you know the tax season deadlines. You also know it is important to know about any changes to the forms. The changes can, and oftentimes do, include which is the up-to-date Form 1099 to distribute to workers. Most recently, the 1099 form independent contractor 2018 underwent notable changes.
The biggest change is that businesses no longer send the Form 1099-MISC to any of their independent contractors. The Internal Revenue Service reintroduced the 1099-NEC form in 2020. Form 1099-NEC is used to report non-employee payments in the amount of $600 or more in a given year.
Ultimately, the classification for independent contractors has not changed. If you are sending an independent contractor a form, you have determined that an employer-employee relationship is nonexistent. Additionally, you recognize that the independent contractor – or the self-employed worker – is not required to have a business in order for your business to report payments on a Form 1099-NEC. All that is required to send a 1099-NEC following the 1099 form independent contractor 2018 is that they are a non-employee performing a service to the company or trade.
These distinctions are perhaps most important because the workforce has changed. Over the past couple of decades, and more so since the coronavirus pandemic, the rise of independent contractors is undeniable. The rise of non-employee workers means that companies distributing these forms is more frequent. However, the rise of independent contractors requires a more detailed explanation. One of the explanations is more workers are entering the labor force as independent contractors. Another understanding is these workers are pursuing independent contracting work for longer periods of time.
How Has the Workforce Changed?
The 1099 form independent contractor 2018 may have changed, but ultimately so has the United States workforce. Independent contract work for many families is now considered a primary source of income. For that reason, businesses need a tax software that stays most current with the latest changes to the United States work and taxes.
Advanced Micro Solutions offers tax software that makes it easy to stay ahead of tax forms. The W2 and 1099 software is lauded for the user’s ability to easily enter the information. The entry screen for the software also resembles actual tax forms and the data is safeguarded. All data gets saved through the company’s 1099 software each time a user accesses a new record or form. As a result, edited data will not be lost. The disc-based software is much more reliable in that regard than cloud-based tax software programs.
Whether your business is large or small, Advanced Micro Solutions is a reliable way to ensure that you distribute all the necessary 1099 forms. Moreover, it will help you avoid encountering any penalties with the IRS for accidental missed forms. The 1099 form independent contractor 2018 is now presented in a different way and adds another form to the mix. Even so, it does not need to be more difficult or time-consuming for any business.