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1099 Form Helper
Not sure which 1099 to file, or whether you need one at all? Answer a couple of questions and get a plain-English answer, with the threshold and deadline.
File a 1099-NEC
You should file a 1099-NEC.
You paid a nonemployee $2,000.00 for services by cash, check, or bank transfer, which is at or above the 600 dollar threshold. Report it on a 1099-NEC (nonemployee compensation).
Deadline: January 31, to both the recipient and the IRS.
This is general guidance, not tax advice. Thresholds and rules can change and edge cases exist, so confirm with the IRS instructions or a tax professional before you file.
Which 1099 do you use?
The quick rule: pay a contractor or freelancer 600 dollars or more for work, by cash, check, or bank transfer, and you file a 1099-NEC. Rent, royalties, prizes, and attorney proceeds go on the 1099-MISC instead, each with its own box and threshold. Payments made by card or through PayPal or Stripe are reported by the processor on a 1099-K, so you do not file anything for those.
For the full breakdown with deadlines and penalties, read 1099-NEC vs 1099-MISC. If you are on the receiving end, our guide on how to fill out a W-9 covers the form that leads to your 1099.
Contractor or employee?
The 1099 only applies if the person is genuinely an independent contractor, not an employee. Misclassifying an employee as a contractor to avoid payroll tax is a costly mistake. If you are weighing the two, the 1099 vs W-2 calculator shows the real cost difference between hiring a contractor and an employee, including the employer side of payroll tax.
FAQs
Frequently asked questions
Do I file a 1099 for payments made through PayPal or a credit card?
No. Card and third-party network payments (PayPal, Stripe, and similar) are reported by the processor on a 1099-K. Filing a 1099-NEC on top would double count. You only report payments you made by cash, check, or bank transfer.
What is the threshold for a 1099-NEC?
600 dollars. If you paid a nonemployee 600 dollars or more for services during the year by cash, check, or bank transfer, you file a 1099-NEC. Royalties on the 1099-MISC have a lower 10 dollar threshold.
Do I send a 1099 to a corporation?
Generally no. Payments to S-corps and C-corps are usually exempt, with attorney fees being the main exception. You mainly file 1099s for individuals, sole proprietors, partnerships, and LLCs.
When are 1099 forms due?
The 1099-NEC is due January 31 to both the recipient and the IRS. The 1099-MISC is due to recipients by January 31 (Feb 15 for some boxes) and to the IRS by Feb 28 on paper or March 31 electronically.
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