Payers send completed 1099 tax forms to the IRS and all independent contractors. We outlined below the steps to take when completing and filing Form 1099-NEC.
Identify which workers are contractors. Independent contractors work for your business, but they operate separately from it. They establish their own hours, pay their own FICA taxes, and control how they complete an assignment. Complete IRS Form SS-8 if you want to establish a long-term work relationship, but you do not know how to classify the worker.
Order the necessary forms. Order forms 1099 and W-9, then print out relevant information for these forms. Order forms directly from the IRS or use software to generate them.
Gather and fill out the forms. Distribute W-9 forms to your independent contractors. Collect all the forms that contain legal names, addresses, entity types, and EINs. Process that information in advance so that you can export the data in your software onto a 1099 form.
Submit and file your forms. Mail or e-file the completed 1099s to the IRS. Send the recipients copies for individual contractor reporting once you fill out a 1099 form as an employer. Save any forms for three to five years.