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What Did We Learn about Investments in 2023?

Reflecting on the tumultuous investment landscape of 2023, Buckingham Strategic Partners distilled invaluable insights into their “Top 10 Investment Lessons of 2023.” ...

The post What Did We Learn about Investments in 2023? first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

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1099-NEC Filing Guide: What You Need to Know Before January 31st, 2024

As we approach the January 31st, 2024 deadline, it’s crucial for all business owners and self-employed individuals to understand the requirements for filing Form 1099-NEC. This form is an integral part of tax reporting, specifically designed for reporting non-employee compensation. Here’s what you need to know to stay compliant and avoid potential penalties.

Understanding Form 1099-NEC

The IRS mandates that businesses use Form 1099-NEC to report payments made to non-employees, such as independent contractors, freelancers, and other service providers. This form is applicable when the total payments to an individual or entity exceed $600 within the fiscal year.

Who Should File?

  • Businesses and Self-Employed Individuals: If you’ve paid more than $600 to an independent contractor, a sole proprietor, a partnership, or an LLC for their services, you need to file a 1099-NEC.
  • Exceptions: It’s important to note that 1099-NEC is not used for employee compensation. Salaries, wages, bonuses, and other employee benefits should be reported using Form W-2.

Trade or Business Payments Only

The requirement to file a 1099-NEC is limited to payments made in the course of your trade or business. Personal payments are not covered under this rule. So, payments made to your babysitter, gardener, or housekeeper, for instance, do not necessitate a 1099-NEC.

Filing Requirements and Deadlines

The due date for filing Form 1099-NEC is January 31st, 2024. This deadline is strict, and failing to meet it can result in significant penalties.

Dual Filing Obligation

Remember, you need to send a copy of the 1099-NEC to both the contractor and the IRS. In some cases, you may also be required to file with your state government.

Avoiding Common Mistakes

  • Misclassification: One of the biggest pitfalls is misclassifying employees as independent contractors. This can lead to severe penalties, so it’s critical to understand the difference.
  • Deadline Compliance: Ensure that your forms are filed on time to avoid penalties.

Seeking More Information

For detailed instructions and additional guidance, visit the IRS website at www.irs.gov/forms-pubs/about-form-1099-nec or contact your tax team at Omni 360 Advisors Staying informed and prepared is the key to a hassle-free tax filing experience.

Schedule your free Exploratory phone call

Click here to see how we
can be of assistance.

Careers/Open Positions

Explore all available job
listings and become a part of an amazing team.

Our Social Media

Connect with us on Social Media using the following buttons:

Visit our Podcasts

Listen in, Join the Conversation!

Recent Posts
What Did We Learn about Investments in 2023?

Reflecting on the tumultuous investment landscape of 2023, Buckingham Strategic Partners distilled invaluable insights into their “Top 10 Investment Lessons of 2023.” ...

The post What Did We Learn about Investments in 2023? first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

See more
What Does the IRS’s recruiting efforts mean for taxpayers?

The IRS’s recent intensification in recruitment to address wealthy taxpayers is raising eyebrows among high-net-worth ...

The post What Does the IRS’s recruiting efforts mean for taxpayers? first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

See more
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Estate planning for business owners, particularly those known for impulsive decision-making, requires a nuanced approach. ...

The post Entrepreneur Estate Plans For Those Who Choose To 1) Ready, 2) Fire, THEN 3) Aim first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

See more