SAN ANTONIO, Jan. 26, 2023 /PRNewswire/ -- Any business that hired an independent contractor in 2022 has until January 31 to submit Form 1099-NEC, Nonemployee Compensation, to the IRS or face penalties. New for this year, the IRS announced a new online filing portal for Forms 1099, the Information Returns Intake System (IRIS). Ensure your tax reporting is correct for 2022 with these five Form 1099-NEC preparation tips from the American Payroll Association.
- If Filing With IRIS, Apply for an IRIS Transmitter Control Code (TCC). To use the IRIS platform, your organization must obtain a TCC code. The IRS expects processing applications will take up to 45 days, so if you haven't already applied, you may have to wait until next year to file with the IRIS platform.
- All Non-Corporate Service Providers Must Receive Form 1099-NEC. Every service provider you paid at least $600 for services during 2022 must receive a Form 1099-NEC by January 31, 2023.
If the service provider is a corporation, you generally do not have to provide Form 1099-NEC. But please note that owners must provide Form 1099-NEC for attorneys' fees and for payments to corporations for legal services. To report payments to an attorney on Form 1099-NEC, you must obtain the attorney's taxpayer identification number (TIN), by having them complete IRS Form W-9, Request for Taxpayer Identification Number and Certification.
- When in Doubt, Send One Out. If you are unsure if Form 1099-NEC is necessary, send one anyway to avoid possible penalties.
- Put Your Credit Card to Work. Form 1099-NEC is not required if you paid a contractor with a debit, credit, or gift card. Instead, the bank or credit card company will do the work for you by sending your contractors a Form 1099-K.
- Deadlines Matter. You have until January 31, 2023, to file Form 1099-NEC on paper or electronically.
For additional tips and resources, visit www.americanpayroll.org. The American Payroll Association is the nation's leader in payroll and accounts payable education, publications, and training.
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SOURCE The American Payroll Association