All the numbers and acronyms in tax forms can be super confusing, but if you earn freelance income and you paid another freelancer $600 or more during the year to help you with your business, you probably need to send them a 1099-NEC. Basically, you’re sending a record to that person, and to the IRS, of how much you paid them. Unless you have a corporation or you’ve got employees, you’ve got to send out a 1099-NEC to each person you paid $600 or more. Prior to tax year 2020, everyone used the 1099-MISC to report non-employee compensation, but the IRS decided to bring back a form from the 1980s (everyone loves the 80s). Ultimately, the process is the same, only the form has changed.

Luckily, these are super easy to take care of. Just head on over to one of the many places where you can file these online, such as https://www.track1099.com/. You can e-file them through this website and set them up to be mailed to the person you paid. It's easy, only slightly annoying, and you're taking care of future you.

Things you need to issue a 1099-NEC:

  • The person’s basic info:
    • Name (or business name)
    • Address
    • SSN (or EIN)
    • If they filled out a W-9 for you, you can pull this information directly from there. Otherwise, just make sure to ask them for this info.
  • Your basic info: 
    • Name (or business name)
    • Address
    • SSN (or EIN).

Please note; the 1099-misc is still around, but is now just used to report miscellaneous income such as:

  • rent payment
  • prizes and awards
  • medical and health care payments
  • payments to an attorney

These are due on February 1st, so be sure to take care of them in a timely manner to avoid any potential penalties!

Then, when you’re putting info in for your own taxes onto our website, you can list these under “People You Paid” on the expenses tab. Be sure to total everyone you sent a 1099 to, as well as anyone you paid under $600 (you just don't have to issue these people a 1099!)

If you don't want to do it yourself, not to worry—we can do it for you for just $25 each. Email us at info@brasstaxes.com to get started on that.