5 Form Independent Contractor 5 Here’s What People Are Saying About 5 Form Independent Contractor 5
So you anticipation the IRS was accomplished tinkering with your amount processes with the absolution of the aboriginal abstract of the 2020 W-4 and Pub. 15-T? Nope. The IRS has addition amount change – it wants to disclose an old tax form—Form 1099-NEC—on which you would address payments to absolute contractors.
The aboriginal time this new anatomy would be filed would be in 2021, for payments to absolute contractors abutting year. And that’s not a lot of time.
The aftermost time the IRS acclimated Anatomy 1099-NEC was for the 1982 tax year.
Cash payments of at atomic $600 to noncorporate absolute contractors are arise to them and the IRS on Anatomy 1099-MISC in Box 7. Anatomy 1099-MISC is additionally acclimated to address assertive nonwage payments to employees, like amercement arising from a accusation and to address gross gain to any attorney.
The problem: The Protecting Americans from Tax Hikes Act of 2015, or PATH Act, breach the filing deadlines:
This breach borderline has acquired administration amaranthine headaches, back the forms now charge to be separated, depending on the boxes that are completed. And the IRS is austere about those filing deadlines. If you afield blooper in alike one Anatomy 1099-MISC with an access in Box 7 with added forms and book all of them afterwards January 31, the IRS will appraise a backward filing amends on all the forms, alike admitting alone one was filed late.
Here’s a attempt of the aboriginal abstract of the new Anatomy 1099-NEC.
The IRS originally said the boxes on Anatomy 1099-NEC would be configured to mirror Anatomy 1099-MISC. That doesn’t arise to be the case, at atomic for this aboriginal draft.
Snag #1: Complementary changes will charge to be fabricated to the accepted 1099-MISC. A absolutely redesigned 1099-MISC could account reprogramming headaches for employers, which will still charge to complete Forms 1099-MISC to address amercement to employees, distributions to estates of asleep advisers and gross gain to attorneys. A accessible band-aid would be to leave all the box numbers the aforementioned and aloof gray out Box 7.
Snag #2: Lots of states participate in an advice administration affairs with the IRS, so you don’t accept to book your 1099s with those states. But some states may not be able to accord with a new 1099.
Upshot: You may still charge to book a 1099-MISC for your absolute contractors for states not accommodating in advice sharing, or for states that bead out of the advice administration program.
Communication is key
Of course, you accept beneath alternation with absolute contractors than you do with your employees. Nevertheless, it would be advisable to alpha cerebration about how you’re activity to acquaint these changes to your accidental workforce, because they’re activity to accept questions back they get an absolutely new anatomy in the mail.
Care to comment
The IRS is demography comments on new Anatomy 1099-NEC through the end of September.
Direct your accounting comments to: Laurie Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, D.C. 20224.
5 Form Independent Contractor 5 Here’s What People Are Saying About 5 Form Independent Contractor 5 – 1099 form independent contractor 2019
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