The time has come to check all the boxes and get your company ready for a quick and smooth filing as Form 1099 filing season approaches in January.
Is your business required to file form 1099-MISC and/or 1099-NEC?
The short answer is YES, if you made any payments of at least $600 to non-corporate vendors or contractors. For details, exceptions and definitions visit the IRS website.
Are you equipped with all the information you need to timely and accurately prepare form 1099s?
It is crucial to keep accurate documentation while working with contractors and vendors. Keep a current, signed W9 on file for every vendor. The vendors and contractors name, address, and tax information such as Social Security (SSN) or Employer Identification Number (EIN) should be listed on form W9. Start requesting and gathering any missing information sooner rather than later.
Updates to Form 1099
As a reminder, form 1099 NEC was introduced in 2020:
Form 1099-NEC (Non-Employee Compensation) is used to report payments made over $600 to non-employees, independent contractors, and vendors.
Form 1099-MISC (Miscellaneous) is used to report other miscellaneous payments, including royalties, rents, medical payments, and payments to attorneys.
The fourth quarter is the ideal time of the year to check that you have up-to-date W-9s available for your 1099 recipient vendors and to ask for any missing information. Review vendor expenditure coding so that you can properly prepare and file your 1099’s at year-end, avoiding mistakes and scrambling at the last minute. The filing deadlines come quickly after year end; be prepared to file accurate, timely forms for your vendors, and avoid costly fines and penalties. The simplest and most cost-effective way to satisfy your filing requirements is to submit your 1099s electronically.
What is new in 2022?
In Form 1099-MISC, some boxes have been renumbered to accommodate a checkbox for the Foreign Account Tax Compliance Act (FATCA) Filing Requirement. 2021 Boxes 13-17 have now been renumbered to Box 14-18 as a result.
2022 1099-MISC Deadlines
• Recipient copies – January 31, 2023
• Paper filing – February 28, 2023
• E-filing – March 31, 2023
Forms 1098, 1099-A, 1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-K, 1099-MISC, 1099-NEC, and 1099-S have been converted to a continuous use form – meaning the IRS does not anticipate annual changes going forward. There are no substantive changes to the form or instructions for the year 2022.
2022 1099-NEC Deadlines
• Recipient copies – January 31, 2023
• Paper filing – January 31, 2023
• E-filing – January 31, 202
Article by Zaid Butt, Director