New Form 1099-NEC

Live Webinar

Webinar Details $219

  • Webinar Date: June 19, 2024
  • Webinar Time: 2:00pm - 3:40pm EDT   live
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Chuck Borek
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5
All Access Membership

Prior to 2020, the Form 1099-NEC hadn’t been used since Disney opened EPCOT and Michael Jackson’s album Thriller was released. Beginning in 1983 the IRS combined the reporting of non-employee compensation with the 1099-MISC, and there it stayed until certain provisions in the Protecting Americans from the Tax Hikes (“PATH”) Act of 2015 caused the IRS to resurrect the 1099-NEC once again. The main impetus was a change in the deadlines affecting information reporting of compensation (whether on a W-2 or otherwise). To combater identity theft and fraud, the IRS accelerated compensation reporting to January 31 from February 28 (or March 31 if filed electronically). This meant that some 1099-MISCs would be due January 31 (i.e., those that reported non-employee compensation) and others due later. To avoid confusion, the non-employee compensation was moved back to the reintroduced Form 1099-NEC. This course will provide you with everything you need to know about this form, whether you are a payor or a recipient. 

Topics covered include:

  • The difference between 1099-NEC and 1099-MISC
  • Common misunderstandings about 1099 reporting generally
  • When 1099-NEC reporting is required
  • The difference between employees and independent contractors
  • Exceptions to the reporting requirements
  • Reporting payments made to attorneys
  • Reporting deceased employee’s wages
  • Procedures for furnishing statements to recipients of compensation
  1. Accountable Plan 01:03:06
  2. Audit 00:46:19
  3. Backup Withholding 00:27:03, 00:28:03
  4. B-Notice 00:26:51
  5. Capital Gain 00:36:13
  6. Capital Losses 00:36:14
  7. CP2000 00:38:30
  8. Disregarded Entity 01:33:01
  9. Exempt 01:33:14
  10. Expense 01:03:02
  11. FATCA 01:33:18
  12. FIRE - File Information Returns Electronically 00:15:31
  13. Form 1099-A 00:05:16
  14. Form 1099-B 00:05:30
  15. Form 1099-C 00:05:50, 01:22:01
  16. Form 1099-CAP 00:07:01
  17. Form 1099-DIV 00:07:10
  18. Form 1099-G 00:07::24
  19. Form 1099-H 00:07:38
  20. Form 1099-INT 00:07:52
  21. Form 1099-K 00:08:10, 01:21:49
  22. Form 1099-LS 00:8:45
  23. Form 1099-LTC 00:08:35
  24. Form 1099-MISC 00:04:08, 00:09:26, 00:14:05, 00:50:00, 01:25:02
  25. Form 1099-NEC 00:01:07, 00:03:43, 00:10:14, 00:13:46, 00:21:18, 00:32:34, 00:48:03, 00:50:12, 01:05:03, 01:23:24, 01:28:48
  26. Form 1099-OID 00:10:22
  27. Form 1099-PATR 00:10:49
  28. Form 1099-Q 00:11:05
  29. Form 1099-QA 00:11:11
  30. Form 1099-R 00:11:22
  31. Form 1099-S 00:11:45, 00:36:23
  32. Form 1099-SA 00:11:51
  33. Form 1099-SB 00:12:03
  34. Form W-2 00:38:40, 00:58:32, 01:21:56, 01:24:49
  35. Form W-9 00:27:06, 01:03:41, 01:20:13, 01:28:38, 01:30:44
  36. Golden Parachute Payments 00:14:03
  37. Gross Proceeds Payment 00:14:03
  38. Independent Contractor 00:28:11, 01:00:57, 01:07:31, 01:09:35, 01:13:43, 01:16:09, 01:23:16
  39. Liability 00:35:18
  40. Limited Liability Company (LLC) 01:18:31, 01:32:57
  41. Schedule C 00:36:06
  42. State “ABC” Test 01:15:34
  43. Subchapter C 01:41:17
  44. TIN 00:25:52, 01:29:32, 01:31:35
  45. Transaction 00:44:31
  • Accountable Plan 01:03:06
  • Audit 00:46:19
  • Backup Withholding 00:27:03, 00:28:03
  • B-Notice 00:26:51
  • Capital Gain 00:36:13
  • Capital Losses 00:36:14
  • CP2000 00:38:30
  • Disregarded Entity 01:33:01
  • Exempt 01:33:14
  • Expense 01:03:02
  • FATCA 01:33:18
  • FIRE - File Information Returns Electronically 00:15:31
  • Form 1099-A 00:05:16
  • Form 1099-B 00:05:30
  • Form 1099-C 00:05:50, 01:22:01
  • Form 1099-CAP 00:07:01
  • Form 1099-DIV 00:07:10
  • Form 1099-G 00:07::24
  • Form 1099-H 00:07:38
  • Form 1099-INT 00:07:52
  • Form 1099-K 00:08:10, 01:21:49
  • Form 1099-LS 00:8:45
  • Form 1099-LTC 00:08:35
  • Form 1099-MISC 00:04:08, 00:09:26, 00:14:05, 00:50:00, 01:25:02
  • Form 1099-NEC 00:01:07, 00:03:43, 00:10:14, 00:13:46, 00:21:18, 00:32:34, 00:48:03, 00:50:12, 01:05:03, 01:23:24, 01:28:48
  • Form 1099-OID 00:10:22
  • Form 1099-PATR 00:10:49
  • Form 1099-Q 00:11:05
  • Form 1099-QA 00:11:11
  • Form 1099-R 00:11:22
  • Form 1099-S 00:11:45, 00:36:23
  • Form 1099-SA 00:11:51
  • Form 1099-SB 00:12:03
  • Form W-2 00:38:40, 00:58:32, 01:21:56, 01:24:49
  • Form W-9 00:27:06, 01:03:41, 01:20:13, 01:28:38, 01:30:44
  • Golden Parachute Payments 00:14:03
  • Gross Proceeds Payment 00:14:03
  • Independent Contractor 00:28:11, 01:00:57, 01:07:31, 01:09:35, 01:13:43, 01:16:09, 01:23:16
  • Liability 00:35:18
  • Limited Liability Company (LLC) 01:18:31, 01:32:57
  • Schedule C 00:36:06
  • State “ABC” Test 01:15:34
  • Subchapter C 01:41:17
  • TIN 00:25:52, 01:29:32, 01:31:35
  • Transaction 00:44:31

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)

CP2000: IRS notice CP2000 is a letter generated and sent to you by the IRS system when the information on your tax return doesn't match the income and payment information the IRS has on file for you. Usually, it means that you didn't report all of your income properly.

Capital Gain: Capital gain is an economic concept defined as the profit earned on the sale of an asset that has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares.

Capital Losses: A capital loss occurs when there is a “sale or exchange” of a “capital asset” at a loss.

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)

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Expense: Offset (an item of expenditure) as an expense against taxable income.

FATCA: FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. (www.treasury.gov). FACTA (Fair and Accurate Credit Transactions Act) is an amendment to FCRA (Fair Credit Reporting Act ) that was added, primarily, to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal and limits the ways consumer information can be shared.

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.

Form 1099-A: Acquisition or Abandonment of Secured Property - On Form 1099-A, the lender reports the amount of the debt owed (principal only) and the fair market value (FMV) of the secured property as of the date of the acquisition or abandonment of the property.

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-C: According to the IRS, nearly any debt you owe that is canceled, forgiven or discharged becomes taxable income to you. You'll receive a Form 1099-C, "Cancellation of Debt," from the lender that forgave the debt.

Form 1099-CAP: File this form for shareholders of a corporation if control of the corporation was acquired or it underwent a substantial change in capital structure. This form is furnished to shareholders who receive cash, stock, or other property from an acquisition of control or a substantial change in capital structure.

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-G: The 1099-G Form, “Certain Government Payments,” is a federal tax form filed by federal, state, or localgovernment entities if they provide Reemployment Assistance benefit payments to eligible claimants.This form is also provided to claimants to show the total amount of unemployment compensation paid tothe claimant during the calendar year

Form 1099-H: Form 1099-H is a federal income tax form required by the IRS. The form is filed by health insurance providers that receive advance payments on behalf of the taxpayer as a recipient of TAA, ATAA, RTAA, or PBGC.

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-LS: File Form 1099-LS if you are the acquirer of any interest in a life insurance contract in a reportable policy sale. An acquirer is any person that acquires an interest in a life insurance contract (through a direct acquisition or indirect acquisition of the interest) in a reportable policy sale.

Form 1099-LTC: Form 1099-LTC, "Long-Term Care and Accelerated Death Benefits," is the IRS form that enables individual taxpayers to report long-term care (LTC) benefits, including accelerated death benefits.

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

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-PATR: File Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person to whom the cooperative has paid at least $10 in patronage dividends and other distributions described in section 6044(b), or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Form 1099-Q: If you're paying for school expenses from a 529 plan or a Coverdell ESA, you will likely receive an IRS Form 1099-Q, which reports the total withdrawals you made during the year.

Form 1099-QA: Any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file this form with the IRS for each ABLE account from which any distribution was made or which was terminated.

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 1099-S: A Form 1099-S is a tax document used to ensure that the full amount received for a real estate sale of some kind is accurately reported. A 1099-S can also be used to report income made on a rental property or investment property. For selling real estate, the buyer must complete and file their own 1099-S.

Form 1099-SA: A 1099-SA is a U.S. tax form that reports distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage medical savings account (MA MSA).

Form 1099-SB: File Form 1099-SB if you are the issuer of a life insurance contract and you receive a statement from an acquirer in a reportable policy sale provided under section 6050Y(a) or you receive notice of a transfer of the life insurance contract to a foreign person.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

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/)

Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control

Gross Proceeds Payment: When a business sells an asset, whether tangible or intangible, it receives a payment, which is the gross proceeds. The amount includes the costs of production and other costs and expenses related to the transaction.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

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.

Schedule C: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if: Your primary purpose for engaging in the activity is for income or profit.

State “ABC” Test: Many states use the ABC test to determine if a worker is an independent contractor or an employee. Thirty-three states use this test as a form of worker classification.

Subchapter C: A C corporation or C corp (named for being in subchapter “C” of the Internal Revenue code) is an independent legal entity owned by its shareholders. A C corporation's profit is taxed twice—as business income at the entity level and the shareholder level when distributed as dividends or realized as capital gains.

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.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.


Guest Speaker

  • Chuck Borek