New 1099 form requirements are in place for 2020 forms reporting. New forms (NEC) for your non-employee compensation (Independent Contractors) that make 600.00 for more in a calendar year. Heavy penalties for not reporting these earnings. In most cases, if you do not follow these requirements, you will not be able to take these paid expenses on your business tax return,.
Mike@MikeMcVay.com * www.PensacolaFLTax.com
Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Payments by federal, state, or local government agencies are also reportable.