If you’re filing 2018 Form 1099, you probably need a refresher on filing requirements. The IRS has made a few changes to the form, and if you have an older version, you may accidentally file incorrectly. In the explainer below, we’ll answer some of the most common questions we get about filing this form. We’ll also explain why a 1099/W2 filing software is a good investment, especially if you’re looking for information on a wage form from 2018. Knowing more about the 2018 and later versions of the form will help prevent filing mistakes and ensure you report compensations correctly.
What is the Filing Threshold for 2018?
There are two filing thresholds to consider for the 2018 Form 1099. You must file 1099-MISC for any person to whom you have paid at least $600 for any of the services the IRS lists on the instructions. This includes rents, fishing boat proceeds, and payments to attorneys. The second threshold is for those who have paid at least $10 in royalties or broker payments to an individual.
Who Needs to File 1099-MISC in 2018?
Businesses, not individuals, need to file IRS 1099 Form 2018. If your business met either payment threshold listed above to any of the included vendors in 2018, you needed to file a 1099-MISC 2018. If you are back-filing, you should still get your 1099 forms to the correct people as soon as possible. Remember that you do not need to file companies that are incorporated.
What Are Some Common Reasons to File a 1099-MISC in 2018?
There are 10 main groups or categories that might give businesses a reason to file a 1099-MISC 2018. The groups are listed on the IRS 1099 Form 2018 itself and include the following:
- Non-employee compensation
- Prizes and awards
- Other income payments
- Health care payments
- Crop insurance proceeds
- Cash payments for fish
- Cash paid from contracts
- Payments to an attorney
- Fishing boat proceeds.
The Difference between 2018 and 2020 1099 Forms
Non-employee compensation is the biggest difference between the 2018 and 2020 1099-MISC forms. In 2018 Form 1099, non-employee compensation was included in Box 7. However, as a result of confusing filing deadlines, the IRS reintroduced form 1099-NEC in 2020. This form is now the new home for non-employee compensation reporting. The addition of the 1099-NEC led to a slight redesign of the 1099-MISC 2020 to account for the change. Box 7 now reports direct sales exceeding $5,000.
The IRS reintroduced the 1099-NEC to streamline filing deadlines for businesses who filed 1099s for both independent contractors and other forms of income. By including all of non-employee compensation on the 1099-NEC, businesses are able to better manage their tax and wage forms.
How 1099/W2 Filer Software Can Help
Those working on back-filing taxes might have some trouble with the 1099-MISC form, given this recent change. If you have additional questions, remember that we have an extensive 1099 FAQ resource section. And, for those looking to keep better track of tax filing deadlines, we want to recommend a software tool. Business owners and accountants can prevent future headaches and potential lapsed deadlines by investing in our W-2/1099 Filer software tool. The software makes filing forms like 2018 Form 1099 quick and easy – and you’ll be less likely to miss a deadline.