Questions about 1099s? We're doing a deep dive this week! We're kicking it off by answering the basics. Who needs to send a 1099? Who needs to receive a 1099?

We'll be focusing on the 1099-NEC, used for non-employee compensation. There's a three-step process we can use to determine if we need to send a 1099-NEC to a contractor or service paid for through your business.

First, did you pay them more than $600 cumulatively over the course of the year? If not, you don't need to send a 1099. If you did pay them more than that, you need to determine if you paid them by cash, check, ACH transfer, or Zelle. If you didn't, no 1099 for them! If you did, the last thing you need to determine is their tax status; are they taxed as a corporation? If they are, you will not send them a 1099.

In short, if you paid someone more than $600 over the course of the year by cash, check, ACH transfer, or Zelle, and they are NOT taxed as a corporation, you will send them a 1099-NEC.

* Related episodes:

160. How to Manage a Business with Multiple Owners with Jeremy Wells, CPA, EA

183. Is it Too Late to Elect the S Corp?

190. Live Q&A: Deducting Startup Costs in a New Business

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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.