The growing number of 1099 contractors has forced the IRS to adjust how payments are reported. Prior to 2020, employers needed to include this non-employment compensation in Box 7 of the 1099 form. This led to some confusion, as different parts of the 1099 – including the 1099 MISC 2019 – had separate deadlines. Now, there is a separate form, called the 1099-NEC, for these types of payments, hopefully alleviating some confusion.
However, many Americans are still filing their 1099 MISC 2019 forms. While late, these forms have a 3-year statute of limitations. This means that, if the IRS notices that you have not filed a 1099 for a contractor, they have up to three years to impose a fine. If you fall into this category of employers, you’re not alone. Rectify your mistakes, then prevent them next time with a comprehensive accounting software.
What You Should Know About Box 7, 1099-NEC, and 1099 MISC 2019
The 2019 1099-MISC form is the last iteration of the form – for now – that includes Box 7. This notorious spot on the form is where employers and contractors reported non-employment compensation. In most cases, these are funds generated through contracted work, like a temporary hire or freelancing. This posed an issue for many users. Many had questions about what qualifies as income on a form also used to report things like fishing boat proceeds, crop insurance proceeds, and medical and health care payments. Plus, different sections of the form had different deadlines, further complicating the process.
The 1099-NEC is a resurrected form used to report non-employment compensation. The IRS has reintroduced this form in order to make the filing process easier for those using a 1099-MISC to report various types of payments and income. Interestingly, if you’re filing a 1099 from 2019 late, you won’t need to worry about the confusion associated with Box 7. The primary confusion had to do with deadlines. If you’re filing late, you’ve likely already missed all 1099 deadlines.
Accounting Solutions from Advanced Micro Solutions
Whether you’re filing a late 1099 MISC form 2019 or using the 1099-NEC for the first time, we can help make the process a little easier. Using an integrated accounting software, like that offered from AMS, can prevent against mistakes, miscalculations, and missing forms. Our software works modularly. This means users can buy the main platform, our 1099/W-2 filer, and select specific add-on tools to create customized software. Find our full catalogue of add-on tools below.
If you’re having trouble with 1099 forms, we recommend pairing our 1099/W-2 filer and AMS Payroll, our semi-automated payroll software. Combining these tools means all your employee and contractor information – personal data, hourly wage, and paycheck information – will be in one place. From there, simply select the form you need to fill out, assign the correct data, and distribute. We know it may be too late for this to help your 1099 MISC 2019 forms, but let us prevent future mishaps.