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Everything You Need to Know About the 1099-NEC Form
What is the 1099-NEC?
The IRS 1099-NEC (Nonemployee Compensation) is used by payers to report annual payments to contractors and service providers not treated as employees. Contractors then use this form to file their own tax returns.
Who gets a 1099-NEC?
- Any independent contractor earning $600 or more from one client in a year.
- Attorneys receiving $600+ in legal fees.
- Service providers such as consultants, designers, writers, drivers, and gig economy workers.
Who files the 1099-NEC?
- Businesses and individuals must issue one if they pay $600+ in a trade or business relationship.
- Payers must file Copy A with the IRS and send Copy B to the contractor.
Why is it important?
- For the IRS: Ensures accurate tracking of contractor income.
- For contractors: Provides proof of income needed for tax filing, mortgages, or loan applications.
- For payers: Avoids IRS penalties for failing to report required payments.
Deadlines
- January 31: Send Copy B to contractors and file with the IRS.
- If filing late, penalties range from $60 to $310 per form, depending on how late you file.
How to file the 1099-NEC
- Collect contractor details using Form W-9 (name, address, TIN/SSN/EIN).
- Fill out the 1099-NEC: report total compensation in Box 1.
- Send Copy B to the contractor by January 31.
- File Copy A with the IRS (e-file strongly recommended).
- Keep Copy C for your records.
Common mistakes to avoid
- Forgetting to issue the form if payments were $600+.
- Sending to employees instead of contractors (employees use W-2).
- Reporting payments processed via PayPal/Venmo (these go on 1099-K instead).
- Filing late or with incorrect taxpayer info.
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Compiled my speaker bio, session outline, and visual aids into one file for a conference. ZenDocs let me combine them fast and add bookmarks for each section. This made navigating during my talk so much easier. I even re-uploaded the final version to make a few changes – every step was smooth. Really appreciated how consistent the UI was.
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I'm a screenwriter and mark up my drafts often. Tried the annotate pdf tool here – it was actually pleasant to use. Notes stuck where I placed them, colors were clear, and export kept everything intact. Beats printing 80 pages every time.
Used ZenDocs to split up a 100-page policy doc into smaller team manuals. It was quick, intuitive, and didn't crash once – even with that massive file.
Compiled my speaker bio, session outline, and visual aids into one file for a conference. ZenDocs let me combine them fast and add bookmarks for each section. This made navigating during my talk so much easier. I even re-uploaded the final version to make a few changes – every step was smooth. Really appreciated how consistent the UI was.
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