Tax season can be a daunting time for freelancers and small business owners. With all the paperwork and filing, trying to make sure everything is accurate can feel like a headache. Fortunately, the Internal Revenue Service (IRS) has made a few improvements to Form 1099-NEC to make things easier in 2020.
There’s A New Tax Form - With Some Changes - For Freelancers & Gig
The 1099-NEC was reintroduced in 2020 to replace the 1099-MISC in order to keep better track of the income reported by independent contractors and freelancers. This new form requires that the income earned be reported separately from other income sources such as business income, rentals and royalties, as well as income from other employees. The new 1099-NEC form also requires that certain items such as health insurance premiums, deductions, and per diem rates be reported separately, making it easier to quickly identify and rectify any errors.
What the 1099-NEC Coming Back Means for your Business - Chortek
The 1099-NEC form simplifies the reporting process and makes it easier to identify mistakes. The most important impact of the 1099-NEC form is that it forces businesses to maintain accurate records of payments made to non-employees. This makes it easier for businesses to quickly identify and rectify any discrepancies.
[選択された] form 1099-nec schedule c instructions 231161-How to fill out
Filling out the 1099-NEC is fairly straightforward. Start by putting your client’s name and address in the recipient’s name and address fields. Then fill out your business name and address in the payer’s name and address fields. Once your information is filled in, fill out the necessary amounts for box 1 through box 7. Box 7 refers to non-employee compensation. Box 8 is for the health insurance premiums, box 9 is for the deductions, and box 10 is for the per diem rate.
What the 1099-NEC Coming Back Means for your Business - Chortek
Once you have finished filling out the form, you will need to sign and date it. Be sure to keep a copy for your records in case you need to refer back to it in the future. Next, you will need to submit the 1099-NEC to the IRS. This can be done either electronically or via mail. The IRS will then use the information on the form to calculate and issue any tax refunds or penalties you may owe.
QuickBooks 1099 Tax Form Changes at 2020 Year-end
For those using QuickBooks, the process is even easier. All you need to do is select File > Forms > 1099 Form. Then select the 1099-NEC form and follow the instructions. QuickBooks also makes it easier to keep track of all your records since it stores all the necessary information on its servers. This makes it easier to access when you need to make changes or if you need to review your records before submitting the 1099-NEC.
