IRS Introduces Form 1099-NEC to Replace 1099-MISC TAC Requests all W9’s be Submitted by Friday, 1/15
December 21, 2020
As the holidays approach and a new year appears on the horizon, your partners at Total Accounting Care are turning our thoughts toward tax season. In just a few weeks, we will begin preparing copies of your 1099 forms. One copy will be sent to the IRS on your behalf; one copy will be posted to the client center for your records, and the rest will be posted to the client center for you to distribute to the subcontractors who work for you, as the filing deadline is January 31.
This year, however, you may notice that the 1099 form looks a bit different.
Earlier this month, the IRS issued a revised 1099 form called the 1099-NEC which will replace the longstanding 1099-MISC. All TAC clients will need to issue the 1099-NEC (which stands for “non-employee compensation”) form to contract workers who were paid more than $600 during the year. This includes all independent contractors, gig workers, or self-employed individuals who previously had their payments reported in box 7 of a 1099-MISC form.
For every Form 1099-NEC, there are two copies that will be filled out with the same information: Copy A and Copy B. Copy A is for the IRS while Copy B is to be sent to the contractor. If you are the independent contractor receiving Copy B, it’s not your responsibility to file the Form 1099-NEC. However, you should request a copy of the form from your client for your records. All of your income will be reported on a Schedule C.
If you haven’t already, we ask that you request W9 forms from all of your employees NOW and provide a copy to TAC, via the client center portal, as soon as possible! During the first week of January, you will find a designated project on the client center where all W-9s can be uploaded. Even if you did not receive a W-9 from a contractor, you can still enter any information you have received from him or her there. We can still issue a 1099 for an employee without a W-9.
We ask that you submit these completed forms no later than Friday, January 15 in order for us to promptly generate the 1099s for each of your employees and not incur penalties on your behalf.
Once Total Accounting Care has received all your information, we will prepare your 1099 forms and then post a copy to the client center for your review/approval. Once approved, we will file one copy with the IRS and then post the other copies on the client center for you to distribute to your contractors. Total Accounting Care does NOT distribute the 1099 to your contractors for you. You will need to download them from the client center and distribute them yourself.
If you have any questions about this process, feel free to contact Max or Nathan in the office. Otherwise, we at Total Accounting Care are so grateful to be your outsourced accounting partner, and wish you and your employees the happiest of holidays and a profitable new year!