Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers
π§Ύ Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers In today’s flexible work landscape, hiring independent contractors can be a smart move—offering agility without the long-term commitments of traditional employment. But with this freedom comes responsibility, especially when it’s time to tackle tax forms like the 1099-NEC . Let’s break down what you need to know about using this form and working with contractors, without the tax jargon overload. π What Is the 1099-NEC? The 1099-NEC (Nonemployee Compensation) is an IRS form used to report payments made to nonemployees for services. It replaced the old use of Form 1099-MISC for service payments starting in 2020 . You’ll need to issue this form if you paid: $600 or more in the calendar year To an individual or business not classified as an employee For services (not products or rent) Who is not incorporated—i.e., a sole proprietor or LLC taxed as such It goes to both t...