👉Click this link to take a quick auto-test and check if you should fill out a 1099 form.
You may have heard about Form 1099 during Tax Season. And right now we are going to tackle them so you can comply with all your startup obligations before the due date.
There is a wide variety of 1099 forms, to record payments made to another party (other than an employee). Due to the fact that 1099 Forms serve as a record of payments, individuals might acquire multiple 1099 Forms at one time.
For startups, the most common 1099 forms are the 1099-NEC and 1099-MISC. In most cases, these will be the only 2 types of Form 1099 you’ll ever have to fill out. Let’s get right into them.
The 1099-NEC and 1099-MISC are the two most common 1099 forms for startups❗
The 1099-NEC is used to report non-employee compensation for independent contractors, freelancers, sole proprietorships, and the self-employed. Most sellers who pay more than $600 a year will receive this form. Examples of eligible payments are contract payments and payments for fees and services to non-employees.
The 1099 MISC is used to report various payments not covered by the 1099-NEC. Royalties must be at least $10, and rent, prizes and incentives, medical and health expenses, and attorney’s fees must be at least $600.
The 1099 process can be tedious, but by organizing ahead of time and staying on track throughout the year, you’ll be better prepared for tax season.
We reached out to Lazo’s tax team for tips on how to help your business get 1099 ready. Their tips were:
Lazo has developed a simple autotest that will help you figure out if you should fill out any 1099 forms. You can access it by using this link.
The Lazo Team💜.