How Do I File a Late 1099-MISC Form?

Posted by Mckenna Duncan on Apr 1, 2022

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Businesses document compensation paid to non-payroll employees and vendors using various 1099 forms. Gig workers, freelancers, and independent contractors receive a 1099-MISC, typically sometime in mid to late January, if they’ve earned more than $600 in compensation in a financial year.

If you are late filing 1099 forms, or submitting them as a gig worker, now’s the time to get them in. Below we’ll cover key deadlines for businesses to send out 1099 information, what freelancers need to do once they receive their 1099, and what to do if you are late.

How to Complete Form 1099-NEC

Starting with the 2020 tax year, Form 1099-MISC was replaced by Form 1099-NEC. The acronym stands for “nonemployee compensation.”

If your business paid out more than $600 to an independent contractor or gig worker, you’ll need to complete a 1099-NEC for those payments. Similarly, if you earned more than $600 from one of your clients or vendors, you can expect a Form 1099-NEC to arrive in the mail. Most often, gig workers will receive all their 1099-NECs by the end of January. If you haven’t received them by the first week of February, you should probably follow up with your clients.

It’s incumbent upon the business (payor) to file a 1099-NEC, not the independent contractor (payee). Filing is a simple process:

  • There are two copies, an A and a B. You’ll be sending Copy A to the IRS, or you can reduce manual filing and complete the document electronically.
  • You’ll need to supply the following information: Federal Employer Number (EIN); business name and address; Payee’s Social Security Number or EIN; and the amount of nonemployee compensation.
  • Send Copy B to the gig worker or freelancer. The deadline is January 31, unless that date falls on a weekend. Then, it’s the next business day. 
  • Typically, businesses send two copies of a 1099-NEC to individuals so they can include one with their tax return and keep one for their personal records.

Previously, businesses had until March 1 to file paper 1099-MISC, and until March 31 if they filed the document electronically. However, those rules are null now that 1099-MISC has been replaced by Form 1099-NEC. The new deadline is January 31.

Penalties For Late Filing of 1099-NEC

Businesses that fail to issue Form 1099-NEC by the January 31 deadline face penalties ranging from $50 up to $270 depending on how long they are past the deadline. Businesses that intentionally fail to send out Form 1099-NECs can be fined $570 or 10 percent of the income that was to be reported on the form. If you paid an employee $20,000, that’s a $2,000 fine for failing to issue a 1099-NEC.

Now that we’ve got your full attention, if you are late filing 1099-NEC, you don’t have to panic or go into hiding. Complete the process the same way you would if you were on time. You might have to pay a modest fine, but it likely will be a small amount compared to failure to send one out altogether.

Freelancers and gig workers must file their 2021 taxes by the end of the filing season, which is April 18 for 2022. Typically, it’s April 15, but that day is Good Friday and Passover, so the deadline has been extended to the following Monday. If you are going to be late, you can request an extension until October 17.

The Bottom Line

Late fees for filing 1099-NECs are $50 for 30 days, $110 if you file by August 1, and $280 if you file after that date. The IRS also charges interest on the penalties it levies.

You can mail in documentation, or use the IRS Filing Information Returns Electronically system (FIRE) to expedite the process. You can access the system at IRS FIRE.

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

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