Some people buy cryptocurrency as an investment. Others hope that…
Do you pay subcontractors? Have you always issued Form 1099-MISC with Box 7 – nonemployee compensation filled in?
For 2020, forms filed in 2021, that appears to be changing. The IRS has prepared a draft form of Form 1099-NEC. This form will be due on January 31, 2020. This form has been in existence before, in 1983 the form was consolidated with the 1099-MISC. Yes, I’m that old. The problem for the IRS has been the processing, some of the Form 1099-MISC were not due until March 31 – which was after a lot of individual income tax returns were filed. Letters were sent from the IRS to individual taxpayers (that neglected to report that income) et cetera. The IRS computers had a difficult time in applying the different due dates for the various Form 1099-MISC so incorrect penalty notices were sent out.
I am certain that a lot of the traditional software packages will have this form available. We have 17 months to get ready for it. Here is the link to the form:
What should you do now? Same as always, have every firm that you pay complete a form W-9. https://www.irs.gov/pub/irs-pdf/fw9.pdf
Let me know if you have any questions.