January 31st Due Date: 1099s to Independent Contractors

The January 31st, 2020 deadline for reporting payments to independent contractors means its likely part of your year-end planning now. While payments to employees are reported to the Social Security Administration on Forms W-2, payments to independent contractors are reported to the IRS using Forms 1099-MISC. Independent contractors are normally considered self-employed and report their income on Schedule C of Form 1040 as Sole Proprietors. If your organization paid at least $600 of non-employee compensation to an independent contractor in 2019 it is required to prepare, send and file Form 1099-MISC by January 31, 2020.

In today’s news at SoundCPA Insights for Business you’ll find information to help your organization:

• Determine whether a person who does work for your organization is an employee or independent contractor

• Other Payments Reported on 1099-MISC

• Requesting Taxpayer Identification Number for 1099 Reporting

• Filing electronically?

• 1099 MISC Form for payments made in 2019 and Instructions

Looking ahead: Non-employee compensation is getting its own form! Payments of Non-Employee Compensation your organization makes in 2020 will be reported using new form 1099-NEC, due in 2021.