Since many of our readers are business owners, Killingsworth Spencer in Roswell wanted to share this brief reminder.
Business owners must file 1099’s for cash and check payments of $600 or more to individuals, attorneys, and unincorporated entities who are NOT TREATED AS W2 EMPLOYEES. Credit card and PayPal payments do not require this filing. 1099-NEC’s include payments for contract labor, commissions, professional services, and other non-employee compensation.
1099-MISC’s are for rents, prizes and awards, royalties, and settlements to attorneys. 1099-NECs and 1099-MISC’s are due February 1st, 2021. There is a $50 penalty per 1099 if not filed within 30 days; after that, a $110 penalty per 1099 if filed between March & July, and a $270 per 1099 penalty for those filed after August 1st. A $550 penalty per 1099 can be levied for intentional disregard.
For the latest official information about developments related to Forms 1099-MISC and 1099-NEC and their instructions, such as legislation enacted after they were published, go to IRS.gov/Form1099MISC or IRS.gov/Form1099NEC. If you have any questions or concerns, please do not hesitate to give us a call at 770-552-8286.