Description
Fully understand the new Form 1099NEC and the new requirements and inputs that go along with it.
In July 2019, the IRS issued a release draft of a new Form 1099 for use commencing in the 2020 tax year (i.e., in 2021), a Form 1099NEC to replace the Form 1099MISC, Box 7 and Box 9 for reporting direct sales of 5,000 or more. This new Form 1099NEC is being implemented in response to problems created by the PATH Act of 2015, when the due date for Form 1099MISC, Box 7 items were moved to January 31, as compared to other 1099 items, which remained due March 31. In this topic, we will focus on the new Form 1099NEC and how to fill it out properly, as well as focus on issues specific to nonemployee compensation that were previously the focus of Box 7 of the Form 1099MISC. Learn what reconfiguration may be needed of your accounting systems, and ensure that you identify vendors that will now require the two different forms (e.g., for rents and lawn maintenance) and what training and communication will be needed to prevent confusion once the new forms are due to be issued by January 31, 2021. By this date, issuers of Form 1099MISC will need to issue a new Form 1099NEC that will replace IRS Form 1099MISC (Box 7) specific to the reporting of nonemployee compensation. The IRS has issued two separate forms, a Form 1099MISC and a Form 1099NEC, to allow for the due date of the Form 1099NEC (January 31) to stand separate from the due date for the Form 1099MISC (March 31). Issuers need to plan now on how to reconfigure their accounting systems, train and communicate with vendors using best practices. Those best practices need to include Form W9 preparation, and addressing backup withholding, and how to avoid penalties. There are hot spots that also need to be addressed, such as how to distinguish employee compensation from nonemployee compensation, addressing Section 530 issues, and spotting when fraudulent forms 1099 are issued implicating Section 7434 claims.
Date: 2021-06-24 Start Time: 1:00 PM ET End Time: 2:40 PM ET
Learning Objectives
* You will be able to identify what the new Form 1099NEC looks like.
* You will be able to discuss why the new Form 1099NEC was issued.
* You will be able to recognize what inputs are required for the new Form 1099NEC.
* You will be able to discuss what reconfiguration, training and communication is needed.