Form 1099-NEC

1. Introduction
2. How Many Different Types of 1099s? 00:5:55
3. Panoply of 1099s 00:08:15
4. Panoply of 1099s 00:012:02
5. Panoply of 1099s 00:15:06
6. Panoply of 1099s 00:16:19
7. A Bit O’ History 00:18:03
8. Form 1099-MISC Example 00:19:25
9. Problems 00:20:13
10. 1099-NEC Is Not New 00:23:45
11. A Tour of Form 1099-NEC 00:24:33
12. Form 1099-NEC Example 00:25:35
13. A Tour of Form 1099-NEC 00:27:55
14. Form 1099-NEC Example - Sales 00:27:59
15. Form 1099-NEC Example - Incorrect TIN 00:31:25
16. Form 1099-NEC Example - Backup Withholding 00:35:36
17. Form 1099-NEC Example - Convenience Boxes 00:38:17
18. Common Misunderstandings About 1099 - What We Say 00:39:25
19. Common Misunderstandings About 1099 - What They Hear 00:39:54
20. 1099 Does Not Determine a Tax Liability 00:40:21
21. There Is No Penalty For Unnecessary 1099s 00:45:03
22. When Is 1099-NEC Reporting Required? 00:48:36
23. Payments Made Jointly to Attorney and Plaintiff 00:50:30
24. When Is 1099-NEC Reporting Required? 00:52:12
25. Employees vs. Independent Contractors 00:53:31
26. The Common-Law Factors 00:55:58
27. Three IRS Categories 01:01:18
28. State “ABC” Test 01:02:45
29. Exceptions to Reporting Requirements 01:14:20
30. Exceptions to Reporting Requirements Cont’d 01:07:35
31. Reporting Deceased Employee Wages 01:10:35
32. Reporting Deceased Employee Wages Cont’d 01:10:49
33. Form W-4 01:12:16
34. Furnishing Statements to Recipients 01:12:45
35. Furnishing Statements to Recipients - Truncation 01:13:29
36. Form W-9 01:15:01
37. Q & A 01:20:34
38. Question 01:20:55
39. The Answer 01:21:56
40. Question 01:26:46
41. The Answer 01:28:07
42. Question 01:29:25
43. The Answer 01:29:38
44. Question 01:30:44
45. The Answer 01:31:51
46. Question 01:32:50
47. The Answer 01:33:18
48. Question 01:34:27
49. The Answer 01:36:00
50. Question 01:36:09
51. The Answer 01:36:28
52. Question 01:37:19
53. The Answer 01:37:28
54. Question 01:38:23
55. The Answer 01:38:35
56. Question 01:39:14
57. The Answer 01:39:57
58. Attendee Questions 01:
59. Wrap-Up 01:40:25
60. Presentation Closing 01:42:14

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  Chuck Borek

  Chuck Borek is a practicing attorney and founder of  the Borek Group, LLC. Chuck is also a CPA, and his background includes  five years as a partner in a public accounting firm. He received his law degree and MBA summa cum laude from the University of Baltimore in 1993, where he was editor [...]

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• Asset 00:10:19
• Backup Withholding 00:36:02
• Balance Sheet (BS) 00:10:13
• B-Notice 00:3353
• Capital Gain 00:41:38
• Capital Losses 00:41:39
• C Corporation 01:18:31
• Compensatory Damages 01:28:26
• Dividends 00:11:29
• EIN 01:36:16
• FATCA 01:19:58
• Form 1099-A 00:08:28
• Form 1099-B 00:08:51
• Form 1099-C 00:09:15, 00:42:02, 01:08:29
• Form 1099-CAP 00:11:18
• Form 1099-DIV 00:11:24, 01:21:57
• Form 1099-G 00:11:47
• Form 1099-H 00:11:52
• Form 1099-INT 00:12:03
• Form 1099-K 00:12:30
• Form 1099-LS 00:13:40
• Form 1099-LTC 00:13:47
• Form 1099-MISC 00:14:29, 00:20:41, 00:49:29, 00:50:38, 00:52:12, 01:29:19
• Form 1099-NEC 00:14:46, 00:19:25, 00:24:40, 00:27:02, 00:30:27, 00:35:03, 00:49:16, 01:23:12
• Form 1099-OID 00:14:53
• Form 1099-PATR 00:15:08
• Form 1099-Q 00:15:22
• Form 1099-QA 00:15:27
• Form 1099-R 00:15:39
• Form 1099-S 00:15:57
• Form 1099-SA 00:16:20
• Form 1099-SB 00:16:29
• Form W-2 00:06:45, 00:23:43, 00:44:21, 00:53:53, 01:05:43, 01:11:01, 01:28:17, 01:33:24
• Form W-9 01:15:01
• Independent Contractor 00:35:46, 00:36:57, 00:53:40, 00:58:24, 01:36:54
• Liability 00:10:29, 00:41:34, 00:43:29
• Limited Liability Company (LLC) 01:04:04, 01:17:07, 01:36:46
• Nonprofit Corporation 00:32:13, 01:37:28
• Schedule C 00:41:29
• S Corporation 01:18:31
• State “ABC” Test 01:02:56
• TIN 00:32:36, 00:54:28, 01:13:36
• Transaction 00:08:49
• Wage 00:53:50, 01:07:02, 01:10:39, 01:28:09

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

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)

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

C Corporation: A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies are treated as C corporations for U.S. federal income tax purposes.

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.

Compensatory Damages: A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. Compensatory damages provide a plaintiff with the monetary amount necessary to replace what was lost, and nothing more.

Dividends: A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders.

EIN: The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

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.

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/)

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.

S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

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.

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.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.