Send specific independent contractors 1099-NEC and 1099-MISC forms. You will have a much easier time reporting payments to independent contractors if you have software that can handle multiple 1099 forms. The contractors must meet certain prerequisites in order to receive the two types of 1099 forms.
Send contractors a Form 1099-NEC if they:
- Do freelance work for you. Send a 1099-NEC to individuals who operate as LLCs or as sole proprietors that you paid during a calendar year.
- Complete contract work for your business. Distribute 1099-NEC forms to contractors who are not employed by staffing firms as W-2 employees.
- Offer independent services that equal or exceed $600 during a year. These services that you need to report may range from web design to legal work.
Distribute your 1099-MISC forms if you:
- Need to report rent. Issue landlord clients a 1099-MISC if you are a tenants or property management company. Use the form to report rent paid within the last calendar year.
- Gave prizes and/or awards. Send a 1099-MISC form if someone received a large cash payment. Individuals need the form to report their winnings, including casino winnings.
- Reimbursed a contractor for certain expenses. Certain contractor supplies and items are not subject to self-employment tax. Distribute 1099-MISC forms to contractors that you regularly reimburse.
Invest in W-2/1099 software once you determine what 1099 forms to send to contractors. Users print tax forms on blank paper with our Software Generated Forms software. Learn about our add-on module with our free demo or by calling us today at (405) 340-0697.