What's new in tax year 2020 (for filing in 2021)?
In 2020, the IRS removed non-employee compensation from the 1099-MISC and included it on a separate form 1099-NEC. If you have affiliates and vendors who earn over $600 or $10 respectively, you will need to file both 1099-MISC and a 1099-NEC forms starting in tax year 2020.
What is a 1099-MISC?
Typically, 1099-MISC forms are used to report payments to vendors who earn $10 or more during the tax year. This is used to report royalty payments. A 1099-MISC can also be used to report many other types of less common business expenses, which all have different minimum reporting thresholds.
Who needs to file a 1099-MISC?
If you have made any payments to a vendor that total $10 or more during the course of the year, that was made in the course of your trade or business you must file a 1099-MISC.
All individuals, sole proprietors, and LLCs must be issued a 1099-MISC. Corporations generally do not need to be issued a 1099-MISC except for under certain special circumstances.
What information do I need to file a 1099-MISC?
If using our WP1099 plugin, we will gather as much of the information as we can for you to file 1099-MISC forms for your marketplace vendors, or affiliates. We look at all payments made during the year using one of the many compatible affiliate or vendor plugins. If payments to any individual are over the minimum reporting threshold, we'll include them in the report that we generate.
If you have made payments to anyone during the year for services outside of your marketplace vendors or affiliates, our export file has a section for every type of payment that can be edited by you before submitting the 1099-MISC forms to the IRS. You can make as many changes as needed so that all the necessary 1099-MISC forms are filed at the end of the year.
What Is The Filing Deadline For 1099-MISC?
Generally, you must file Form 1099-MISC by March 1 if you file on paper, or March 31 if you file electronically. WP1099 makes it easy to file electronically through any number of online e-file services, which gives you a whole extra month to file.
What information do I need to collect?
WP1099 does not collect sensitive information like social security numbers, or employer identification numbers. You can collect this information from your vendors or affiliates by sending an IRS W9 form to each vendor. It is highly recommended that this information is stored in a safe place so that unauthorized individuals do not get access to it.