On Demand Webinar

New Form 1099-NEC

Webinar Details $219

  • Rated:
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Steven Mercatante
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0
All Access Membership

This webcast provides accounts payable with plain English explanations breaking down the toughest 1099 due diligence situations for 2021 - featuring a comprehensive box-by-box review of both the new  Form 1099-MISC and 1099-NEC:

Agenda:

• Get tips for addressing how the new IRS Forms 1099-NEC and 1099-MISC impact your in-year due diligence for 2021

• Break down the new Form 1099-MISC and NEC trickiest compliance situations: rent, leases, prizes and awards, hotel payments, freight payments, attorney and settlement payments between the two forms, backup withholding, where medical service provider payments are now going, discover when the reporting does not follow the payment, where to report non-qualified deferred compensation, determine when payments are 1099-S, 1099-INT, and W-2 reportable instead of on the 1099-MISC or 1099-NEC, and more...

• Learn how to reshape your vendor validation tasks for 2021

• Discover how to differentiate between payments that are now 1099-NEC reportable versus those that are 1099-MISC reportable

• Identify key elements of the IRS due diligence and reasonable cause rules related to these new forms and recognize how to identify the reportable payee when you pay sole proprietors, LLCs, payee's merged or bought by another, S-Corps, agents, liens/garnishments, and other middlemen.

• Live question and answer with our tax expert!

Learning Objectives:

  • Learn to break down the new Form 1099-MISC and NEC trickiest compliance situations
  • Learn how to reshape your vendor validation tasks for 2021
  • Learn how to differentiate between payments that are now 1099-NEC reportable versus those that are 1099-MISC reportable

Level: Intermediate
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Taxes
Program Prerequisites: None
Advance Preparation: None

  1. IRS Focus: The Tax Gap 00:01:14
  2. The Law - Learn it, Know it, Live it 00:05:33
  3. What’s New - Big 1099 Filing Changes Coming - Changes To FIRE 00:09:27
  4. What’s New - Big Filing Changes Coming - IRS Requirements 00:19:05
  5. What’s New - Big Filing Changes Coming - New Corrections Processing Rules 00:21:42
  6. The Form 1099 NEC’s New Box Two and Changes to Box One 00:24:29
  7. The Form 1099 NEC Box One - Reportable Payments 00:29:24
  8. The Form 1099 NEC Box One - Examples of Payments 00:34:23
  9. 1099 NEC Box One: Expense Reimbursements, Accountable Plans, T&E, Fringe Benefits 00:41:09
  10. The Form 1099 NEC Box One - Other Implications 00:47:14
  11. The Form 1099 MISC’s New Box Eleven 00:52:16
  12. 1099 MISC Box One Issues 00:53:40
  13. 1099 MISC Box Two Issues 00:56:42
  14. 1099 MISC Box Three Issues 00:59:11
  15. 1099 MISC Box Six Issues 01:02:30
  16. 1099 MISC Boxes 12 and 14 vs. 1099 NEC Box One Director’s Payments 01:03:32
  17. The Form 1099 MISC is Still Big…But Not the Whole Show - Non-Reportable Payments 01:05:07
  18. The Form 1099 NEC Box 4 vs. 1099 MISC Box 4: Watch That Backup Withholding - Your Action Steps 01:05:44
  19. The “Other 1099’s”: The 1099 K vs. The 1099 MISC/NEC 01:08:37
  20. The “Other 1099’s”: The 1099 R vs. the 1099 MISC/NEC 01:13:24
  21. The “Other 1099’s”: The 1099 INT, 1099 B, 1099 DIV, 1099 C vs. the 1099 MISC/NEC 01:14:46
  22. The W 9 To The 1099: Be Careful 01:16:43
  23. The W 9 To The 1099: Be Careful When to Get an Updated Form W-9 01:18:27
  24. 1099 Data Validation Basics - Identifying Your Payee: Who is 1099 Reportable? 01:20:34
  25. 1099 Data Validation Basics - U.S. Persons 01:21:09
  26. Always Validate Claims of Non-Reportability - Corporations 01:23:01
  27. Always Validate Claims of Non-Reportability - The LLC  01:23:12
  28. Always Validate LLC’s - The LLC as the Disregarded Entity 01:23:26
  29. The Exempt Organization - Tax Exempt Organization Search Tool 01:23:36
  30. The Middleman And the 1099 NEC 01:24:17
  31. Protect Yourself 01:26:56
  32. Attendee Questions 01:28:02
  33. Presentation Closing 01:43:12
  • Accountable Plan 00:36:21,  00:41:09
  • Audit 00:13:28
  • Backup Withholding 00:06:08, 00:33:06, 01:06:51
  • B-Notice 00:06:34, 01:06:17
  • DBA -Doing Business As 01:17:19
  • De minimus 00:37:10
  • Disregarded Entity 01:17:47
  • Expense Reimbursement 00:35:34, 00:41:20
  • Fair Market Value (FMV) 00:59:54
  • FIRE - File Information Returns Electronically 00:10:14, 00:15:55, 00:17:31
  • Form 1042 00:17:48
  • Form 1042-S 00:17:48, 01:21:00
  • Form 1099-B 01:16:01
  • Form 1099-DIV 01:16:11
  • Form 1099-INT 01:14:55
  • Form 1099-K 01:05:37, 01:08:55
  • Form 1099-MISC 00:05:43, 00:25:00, 00:36:15, 00:52:26
  • Form 1099-NEC 00:05:42, 00:07:35, 00:12:53, 00:25:11, 01:02:43
  • Form 1099-OID 01:
  • Form 1099-R 01:05:35, 01:13:28
  • Form 8809 00:47:37, 01:05:56
  • Form 990 01:24:04
  • Form W-9 00:08:48, 01:16:44, 01:18:14, 01:20:45
  • Fringe Benefits 00:36:38, 00:41:19
  • Garnishment 01:24:51
  • IRC Section 3406(a) 00:06:06
  • IRC Section 409A 01:03:33
  • IRC Section 6041(a) 00:05:33, 01:11:36
  • IRC Section 6109(a)(2) 00:05:33
  • Levy 01:24:51
  • Limited liability company (LLC) 01:17:42, 01:23:12
  • Nonresident Alien (NRA) 00:17:53, 01:20:55
  • Reasonable Cause 00:16:44
  • Resident Alien 01:21:13
  • Tax Exempt Organization Search Tool 01:23:49
  • Tax Gap 00:01:14
  • TIN 00:07:30, 01:17:09, 01:18:40, 01:19:03
  • Transmitter Control Code (TCC) 00:10:14, 00:17:39
  • Vendor 00:09:11, 00:22:17, 01:18:35

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

Audit: A formal examination of an organization's or individual's accounts or financial situation

B-Notice: A notice from the IRS stating that one or more tax ID numbers were missing from a 1099 or do not match the IRS records.

Backup Withholding: Backup withholding is the tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. (www.investopedia.com)

DBA -Doing Business As: Sometimes it makes sense for a company to do business under a different name. To do this, the company has to file what's known as a DBA, meaning "doing business as." A DBA is also known as a "fictitious business name," "trade name," or "assumed name."

De minimus: Too trivial or minor to merit consideration.

Disregarded Entity: A disregarded entity refers to a business entity with one owner that is not recognized for tax purposes as an entity separate from its owner. A single-member LLC ( “SMLLC”), for example, is considered to be a disregarded entity. (www.pntax.com)

Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)

FIRE - File Information Returns Electronically: The IRS FIRE system is the electronic network used to accept and process most types of filing forms. Technically, it stands for File Information Returns Electronically.

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Form 1042: Form 1042, also "Annual Withholding Tax Return for U.S. Source Income of Foreign Persons", is used to report tax withheld on certain income of foreign persons.

Form 1042-S: Form 1042-S is used to report amounts paid to foreign persons (including persons presumed to be foreign) who are subject to income tax withholding. For an individual taxpayer, Form 1042-S is a document provided to you (and the IRS) by the payer of the income reported.

Form 1099 MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payment?s made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)

Form 1099-B: Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form that is issued by brokers or barter exchanges. The form lists the gains or losses of all broker or barter exchange transactions.

Form 1099-DIV : Form 1099-DIV: Dividends and Distributions is an Internal Revenue Service (IRS) form sent to investors who receive distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each Form 1099-DIV should be reported on an investor's tax filing.

Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.

Form 1099-K: A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 1099-OID: Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by the holder of debt instruments which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price.

Form 1099-R: Form 1099-R is a tax form from the Internal Revenue Service (IRS) for reporting distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.

Form 8809: Use Form 8809 to request an initial or additional extension of time to file only the forms shown on line 6 for the current tax year.

Form 990 : Form 990 (officially, the "Return of Organization Exempt From Income Tax") is a United States Internal Revenue Service form that provides the public with financial information about a nonprofit organization. It is often the only source of such information.

Form W-9: Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). - Wikipedia (https://en.m.wikipedia.org/)

Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.

Garnishment: A legal summons or warning concerning the attachment of property to satisfy a debt

IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.

IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.

IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.

Levy: A tax levy, under United States Federal law, is an administrative action by the Internal Revenue Service under statutory authority, generally without going to court, to seize property to satisfy a tax liability. The levy "includes the power of distraint and seizure by any means".

Limited liability company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.

Nonresident Alien (NRA): This income is taxed at a flat 30% rate, unless a tax treaty specifies a lower rate. Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents.

Reasonable Cause : Reasonable cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.

Resident Alien : A resident alien is a foreign person who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the United States, a person needs to either have a current green card or have had one in the previous calendar year.

TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.

Tax Exempt Organization Search Tool: Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings.

Tax Gap: The gross tax gap is the difference between true tax liability for a given tax year and the amount that is paid on time. It is comprised of the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.

Transmitter Control Code (TCC): The Transmitter Control Code (TCC) is an identifier that the IRS uses to distinguish different electronic filing companies. It's necessary when you need to file for a correction. Getting a TCC depends on how you file your 1099 forms

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.


Guest Speaker

  • Steven Mercatante

CPE Credit

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