It’s almost time for businesses to file their 1099s, a deadline that comes before the annual federal deadline. There are a number of different 1099 forms that report the various types of income an individual may receive, and the IRS requires businesses to report these payments to others.
The majority of 1099s are filed through one of two 1099 forms – the 1099-NEC, which stands for Non-Employee Compensation (introduced in 2020), and the 1099-MISC, which stands for Miscellaneous Information. Here’s the difference between the two:
- 1099-NEC is used to report any non-employee compensation of $600 or more as well as attorney fees.
- 1099-MISC is used to report miscellaneous compensation. Here are a few of the most common ones: rent, prizes/awards, other income payments, medical/healthcare payments, and gross proceeds paid to an attorney.
Check out the IRS website for more detailed information about which payments fall under each of these two 1099 forms in 2023. However, the IRS rules are never that simple, are they?
1099 Form 2023 Help
Naturally, there are a few other circumstances to consider. That’s why our team of professionals is ready to help make a bit more sense of everything. Not only can Acuity’s bookkeeping team provide clarity into the complicated process that is filing 1099s, but we can handle everything necessary to electronically file your company’s 2023 1099s.
Additionally, if you’re unsure of your filing requirements, our team can easily confirm what you need to file before the deadlines.
Here are some ways we can help:
- If you are a current customer who utilized our 1099 services last year, we’ve already got you on this year’s list. All you need to do now is stay tuned for further details.
- If you are a current customer who did not utilize our 1099 services last year, we’ve got you covered! Just schedule a time to chat with your services team member. Once you’ve signed up, we’ll complete a basic analysis to determine the health of your books and check for any important details that may be missing from your W9 records.
- If you are not currently an Acuity customer but are interested in 1099s help or other tax services — reach out to our team today to discuss!
As seasoned financial experts, we often receive inquiries regarding who should and should not receive a 1099. Here are some of the answers to your most frequently asked questions.
Q: Is there a new 1099 form for 2023?
A: No, the last revision to the form was made in January 2022. See form here: https://www.irs.gov/pub/irs-pdf/f1099msc.pdf.
Q: Where can I get a 1099 form for 2023?
A: If you work with Acuity, we’ll send them to you directly! If you do not wish to go through us, you can order them on the IRS website. However, again, it’s not as easy as printing them out and issuing them. Here’s a page from the IRS website that might be helpful.
Q: How do I file a 1099 for self employed?
A: Information returns can be filed electronically, or you can mail them. However, you cannot print and file from the IRS website. The IRS wants you to use a specific format for 1099s, which is not available online.
Q: Can I print my own 1099 forms?
A: If you’re a recipient of a 1099 form(s), and you’re using Acuity’s services, you can! We use a technology that allows you to print from home. Just provide us with your email address, and you’ll be good to go!
Q: Can Acuity revise my 1099 filings?
A: We can only do revisions if we’ve done the original filing.
Q: How much money do you have to make to file a 1099?
A: $600, but the terms differentiate depending on whether you receive a 1099-MISC or a 1099-NEC. Also, the method of payment matters here, too. If you’ve been paid by a credit card or payment card, then you don’t file.
Q: What does it mean to be a 1099 employee?
A: It’s essentially a small business owner or an independent contractor who needs to file with the IRS.
Q: What are the rules for 1099 employees?
A: This is a good question because some people should be hiring people as employees rather than contractors. If they’re doing 35 hours per week with someone, then maybe they shouldn’t be a 1099 employee. The independent contractor doesn’t receive benefits, and they don’t have workplace autonomy, such as control over hours worked.
Q: Who pays taxes for a 1099 employee?
The independent contractor pays their own taxes. But, there is a situation where if the contractor doesn’t receive a W9, and they’re required to fill out a 1099, there could be a backup withholding charge to the business.
Q: When is the deadline for filing 1099s?
A: The deadline for recipients to receive their 1099s this season is January 31, 2023. There are certain forms where the deadline is a little bit later, based on which box the data is reported in, however, it’s best practice to aim to have everything done by the 31st. Taking care of your business’ 1099s as early as possible is for the best!
Q: What information is needed to file a 1099?
A: As mentioned briefly above, it’s important (and well-advised) that you have a completed W-9 form on file for every non-employee paid during the year. Ideally, you should already be collecting W9 forms throughout the year for your business records.
(Pro Tip: A best practice for companies is to ensure that you always collect a W9 form prior to issuing payment.)
W9 forms are meant to document any non-employee whom you paid more than $600 throughout the year, by payments other than credit card. Those are the payees for whom you’ll be required to file the 1099 form.
Also, we recommend that you deliver 1099s via email rather than via mail or physical copies. This ensures that people can’t lose them, or that they can never say they didn’t receive them physically (i.e. moves can throw off delivery).
Q: Do foreign contractors receive a 1099?
A: Foreign contractors do not need a 1099 as long as –
1) they are not a US citizen, and
2) the work was performed wholly outside the U.S.
However, to verify these two facts, you must have the foreign contractor fill out form W-8BEN to keep for their records. If a foreign contractor is subject to US income tax, then form 1042 must be completed and filed with the IRS.
Q: Is a 1099 required for personal expenses?
A: Do not file a 1099 for personal expenses, even if they were paid from a company account.
Q: What about rent payments or reimbursements for mileage?
A: Rent payments should get a 1099 but only for the rent portion of the payment. Reimbursements for mileage or expenses should not be reported on a 1099.
Q: Are 1099s based on the date of payment or date of check clearance?
A: 1099s are based on the dates the payment was made regardless of when the check cleared the bank.
Q: Can you request an extension?
A: A 30-day extension of time to file a 1099 (reporting NEC only) can be requested using IRS form 8809. However, businesses must meet no less than 1 out of 5 listed criteria, as specified per box 7 of form 8809.
Q: Are there any recent changes to consider?
A: Changes from recent years are related to Form 1099-K, lowering the threshold for filing from $20,000 to $600. Companies such as PayPal, Stripe, Venmo, and Square will send a 1099-K to those who have received more than $600 in payments in 2023. These third party settlement organizations are responsible for issuing the form.
Q: How can Acuity help with 1099s?
A: Acuity offers 1099 services and W-9 collection services that were made for businesses like yours. We advise that you reach out to your services team member for clarification and further assistance! You can also get in touch with here.
Q: My payroll company does my 1099s. Do I still need Acuity’s services?
A: It’s a common misconception for people to assume that payroll companies, or even that third-party partners (like Bill.com), cover all of your 1099 filing needs. Certain payroll companies are only filing 1099s with data from their software, meaning they don’t connect to your accounting platform to consider other expenses.
You might need the help of Acuity to bridge that gap. If you’re an existing client of Acuity, reach out to your services team member. If you’re a new client, reach out to our team today to discuss!
Q: What happens if I don’t file the required 1099s?
A: Remember, filing a 1099 is the law. If you file late, you could face penalties ranging from $50 (if not more than 30 days late) to $110 (31+ days late) per form, with a maximum penalty fee of $1,177,500 per year, depending on how late your filings are. Intentionally disregarding the requirement to provide a correct 1099 form leaves you subject to a minimum penalty of $580 per 1099 (and that has no maximum).
Additional Tax Resources
Free Quarterly Tax Estimates Calculator
Tax estimates are dreadful, but they can make or break your tax filing (and your sanity) depending on how they’re handled! Most people feel like they don’t have a tax plan, and no one we talk to seemed to have a tool that helped. So, we created one! Here’s your go-to guide for quarterly tax estimates, including a free calculator to use.
Free Consultation with Our Team
Still have unanswered questions? Schedule a free consultation with our team!
Tax Services for Small Businesses & Startups
If you still have questions, let us know! We’re well-versed in filing 1099s, utilizing tax credits, and assisting you with all of your tax preparation needs. Check out our tax services page, or speak with a team member today!