Who needs a 1099? {1099-NEC Explained}

Error Correction:
There was a version of this video that stated that lawyers/attorneys would need a 1099 regardless of the amount paid (i.e. even if it was under $600). That is INCORRECT. Only payments made over $600 need a 1099 - even for lawyers. This has been edited out of the video. However, one thing you need to keep in mind for lawyers is that you need to send a 1099 to them even if they are a corporation. All other contractors can be excluded from 1099 reporting if they are a corporation (S or C Corp).

1099 reporting is due January 31st for all businesses. This does not give business owners a ton of time to pull together their data and report it to the IRS. Avoid penalties and get your 1099s in on time!

In this video we cover what you need to know about the 1099s you need to give to non-employee compensation (reported on form 1099-NEC). Here is the IRS form 1099-NEC: https://www.irs.gov/pub/irs-pdf/f1099nec.pdf

Who should get a 1099?
- Individuals or businesses that have provided services to a company
- Over $600 for MOST services
- A Corporation (S or C corp) – these do not need a 1099
- If they file as a S corp or C corp – then they do not need a 1099

Don't get hit with penalties for misunderstanding and underpaying your taxes. Save money and stress by getting this right every year!

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Hannah Smolinski is a #CPA and the Founder of Clara CFO Group. Find out more about Clara CFO Group at https://claracfo.com/

Disclaimer: This video is intended for educational purposes and
should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Clara CFO Group, LLC is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience.