1099 & W-2 Filing Guide for Small Business

1099-NEC are used when business taxpayers to report payments of nonemployee compensation.

You must must complete this form to report any payment of $600 or more to a payee such as a contractor, freelancer, attorney and others.

For the 2022 Tax Year, 1099-NEC forms are now dateless.

You must now fill in the year on each 1099NEC form for 2022. If you use software to print forms, you need to update your system to accommodate this important change.

Other 1099-NEC Form Changes for 2022

There were minor changes to the 1099NEC form for 2022, mainly to accommodate the dateless format change. There were minor border shifts, a new box for the year.

There were also verbiage changes to the instructions, including text additions and deletions, as well as removing language about a specific year.

Generally, this form is due by January 31st – to be mailed to the recipient and mailed or e-filed with the IRS.

There is no automatic extension for this form but may be available under certain hardships.

Nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the TIN provided was incorrect.

More information about this form can be found here: Form 1099-NEC, Nonemployee Compensation

2022 Changes to 1099-MISC Forms

There is a NEW, dateless format for 1099MISC forms in 2022. You must fill in the year on each form. A software update is required. 

In addition, some minor changes have occurred on the forms. 

• Border shifts to accommodate dateless format
• New box with area to fil in the year
• Moved 2nd TIN box to be under FACTA filing requirement and adjusted the box sizes, etc. accordingly
• Minor verbiage changes to instructions, removing year references

For tax year 2022, individuals, partnerships, LLCs, and corporations that earn $600+ through various online venues will start receiving Form 1099-K, Payment Card and Third-Party Network Transactions, on which that income will be reported to themselves and the IRS.

This change will substantially increase the number of Forms 1099-K required to be filed with the IRS and furnished to recipients in early 2023.

As the result of a provision in the American Rescue Plan Act of 2021, if a TPSO—or its electronic payment facilitator, or EPF—makes payments totaling more than $600 in a calendar year to a payee, it will be required to report those payments on a Form 1099-K. Importantly, many Web 2.0 e-commerce websites and gig-economy services are TPSOs for Form 1099-K reporting purposes.

More on 1099-K Requirements

Here is a great article from Entrepreneur Magazine about who is required to file 1099 forms and why, the exceptions and how you can be proactive about 1099s to protect your business from large penalties. 

Read the Article