The 1099 is a set of IRS forms designed for individuals or businesses to report payments made to non-employees, like contractors or freelancers. The payer is responsible for filling out the form and sending copies to the payee and the IRS.
There are a few types of 1099 forms, but the most relevant for self-employed people is the 1099-NEC. This is the one that the payer will use to report how much they paid an independent contractor in a given tax year. (NEC stands for “Non-employee Compensation.”) Other 1099 forms, like the 1099-MISC or 1099-DIV may be used to report payments for rental income, dividends, tax refunds, and more.
If you earned $600 or more in non-employee compensation in a given year, you should receive a 1099-NEC form no later than January 31st of the following year. (If January 31st isn’t a business day, it should arrive by the next business day.) Conversely, if you pay a subcontractor $600 or more in a tax year, you’ll need to file a 1099-NEC for them.
The information you will need to fill out the 1099-NEC is stated in the official form, but the main details are:
Your name, address and phone number
Your TIN (EIN or SSN)
Recipient’s TIN (EIN, SSNm ITINs, ATINs)
Recipient's name and address
How much they were paid
You can file a 1099 by printing the form, filling it out and sending copies to the IRS and the payee. If you’d prefer to file electronically, a service like Found can help. When you pay someone through Found, you can securely request their tax information, and each payment is recorded. That way, Found can auto-generate a 1099-NEC for the payee that you can file at the end of the year.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.