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Tax deadlines may not roll around until Feb. 1, 2021. But it’s never too soon to brush up on what you need to know for filing.
That’s especially true if you’re a small business owner.
What’s new for the 2020 tax year? For one thing, form 1099-NEC replaces form 1099-MISC for reporting non-employee compensation. Actually, it’s a new version of an older form that’s been out of use since the 80’s.
Of course, the standard 1099-MISC remains but will serve a somewhat different purpose.
But figuring out which information belongs on which form will definitely be a major challenge during this tax season. Fortunately, efile4Biz has a resource to help you learn more and start filing online.
So brush up on these forms. Both come with their own requirements.
REMEMBER: If you pay contractors and other self-employed service providers – whether individuals, partnerships, estates or corporations – you MUST know about the 1099 forms and how to use them.
You’ll need to mark your calendar too!
There are deadlines for providing these forms to your contractors and submitting them to the IRS.
Before that, you’ll need to make sure you have the right information for each one of your service providers. So if you still need to collect that information, you have no time to waste.
Figure out what to collect. During the year, you may have paid independent contractors, janitorial companies, third-party accountants and other service providers who are not on your payroll. If they are not your employees, you need to obtain crucial information from them — including a W-9 and tax identification number.
Consider getting an early start. Don’t wait until the last minute to start filing. Many forms can be filed early — as early as the fourth quarter.
Start filing online. From buying a new pair of shoes to handling a banking transaction, more of us are handling money matters online these days. Why should reporting to the IRS be any different? Filing your business taxes online is easy.
IMPORTANT: If you prepare taxes for a number of small business clients, take note. You probably have even less time to get up to speed with some of the changes to the 1099 forms.
Remember, you’ll need to make sure each of your clients have collected the proper forms from each of their service providers. That needs to happen before you can even begin sending out 1099 forms and filling out your client’s tax returns.
Changes to the existing forms will mean a different way to record payments made to your clients’ contractors. And depending on how many service providers they have, this could be daunting.
Luckily, you don’t need to struggle through the process. An online resource offers all the help you need to file 1099s and W-2s whether for your own small business or a whole host of small business clients.
efile4Biz offers a wide range of solutions plus online support. Read their detailed explanation of what you need to know to complete your 1099s in the link below. Get started brushing up on the changes to the 1099 forms and start filing your business tax returns online today:
This article, “What You MUST Know to File Your 1099 Tax Forms in 2021” was first published on Small Business Trends
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