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What is the 1099-MISC form?
The 1099 MISC Form is a document pertaining to the 1099 S Internal Revenue Service that helps in reporting miscellaneous compensation payments, such as rent, awards, prizes, and payments made to medical practitioners or advance payments.
In an investment year such as prior to tax year 2020, the 1099-MISC form was used to report non-employee allowances for independent contractors, freelancers, sole proprietorships, and even self-employed persons. However, it was while it was still 2020 that non-employee pay began to be recorded in Non-Employee Compensation.
What is the 1099-MISC form used for?
The 1099-MISC form covers a wide range of compensation that includes but is not limited to rent, award winnings, beyond prize, and cumulative healthcare payments to pronoun advocates. Whenever a business pays you legal fees worth over $600 or more, it must file a 1099-MISC form because such payments do not attract self-employment taxation.
What is the difference between 1099-MISC and 1099-NEC?
Prior to the 2020 tax year, miscellaneous income, including non-employee compensation, was reported on the 1099-MISC form. At the beginning of 2020, the IRS developed the 1099-NEC and decided that it would only be used to treat non-employment compensation as opposed to other forms of payment.
Other income corresponds to 1099-MISC forms when reporting these other payments. Now that we have a clear concept of these two forms, let’s discuss the deadlines for each of them.
March 1 is the due date for filing the IRS form 1099-MISC if you file it by mail, and March 31 if you file it electronically. The due date for filing a form 1099-NEC is January 31 for the following tax year.
Also, See: 1099 NEC Form
