What is IRS Form 1099-NEC Online: Everything You Need to Know

 

If you’re an independent contractor, you’ve likely heard of the 1099-NEC form and asked yourself “What is a 1099-NEC?” Stride is here to explain everything you need to know about the 1099-NEC Form Online so you are ready to tackle tax season.

What Is a 1099-NEC Form?

There are 15 different types of 1099 forms and the 1099-NEC is just one of them! The 1099-NEC is a form that reports how much you’ve been paid by a company. 1099-NECs are only sent to nonemployee individuals. Put simply, the 1099-NEC is used by companies to report how much they’ve paid independent contractors.

Who Will Receive a 1099-NEC?

If you work as an independent contractor, you are eligible to receive a Form 1099-NEC. However, a company is only required to provide you with a 1099-NEC if you’ve received at least $600 in payments in a given tax year. While the company you work for might issue you a 1099-NEC if you don’t meet this $600 onset, it is not need to.

When Will I Receive My 1099-NEC Form?

Your Form 1099-NEC needs to be postmarked by January 31 at the very latest. This means you should have it in your hands by early February!

 

How Do I Use My 1099-NEC When I File My Taxes?

The most important box that you’ll use on this form is Box 1. This box is titled “Nonemployee compensation” This is the total you’ll use when calculating your business profit or loss on the Schedule C. This number will go on Part I, Line 1 of your Schedule C. 

Keep in mind that you need to pay taxes on this income!

I Spotted a Mistake on My 1099-NEC; What Now?

First, make sure you’ve double-checked that the total reported on your 1099-NEC in Box 1 equals the total amount of payments you have on record. To do this, you should add up all the money that was sent to your bank account. This should match what your 1099-NEC Online Filing shows. If it doesn’t, reach out to the company quickly to have your form corrected. 

Additionally, if the IRS sends a notice about underreporting on your 1099-K form due to the mistake you found, here’s what to do:

1. Respond within the amount of time allowed in the letter.
2. Provide an explanation as to why you reported the amount of income you did on your Schedule C.
• If you filed your tax return before your 1099-NEC was corrected, provide that as your reasoning.
• Pro tip: It is best to not file your tax filing until your 1099-NEC is corrected.
3. Seek a tax professional to help you through the process if you need further assistance.