Instructions to File 1099-NEC for 2024 Tax Year

Step 1:

Log in to Tax1099 and click Create Form.

Select the Tax Year and Form 1099-NEC.

If you are filing Form 1099 MISC, please check this blog. Form 1099-MISC Instructions for the 2024 Tax Year | Tax1099 Blog

Step 2:

You'll now see the 1099-NEC form with four main sections: Payer, Recipient, Federal, and State Filing Details.

Step 3:

Now let’s Add Payer Details.

If the payer is already added, click Select and choose from the existing list of payers. To add a new payer, click Add and select Individual or Business.

• For individuals: Provide their name, SSN, contact, and address.
• For businesses: Enter the Business Name, EIN, contact, and address. Click Submit once all details are entered. The payer details will now appear on the form.

Step 4:

The next step is to Add Recipient Details Similarly, if the recipient is already added, click Select and choose from the list. To add a new recipient, click Add and choose Individual or Business.

• For individuals: Provide their name, SSN, contact, and address.
• For businesses: Enter the Business Name, EIN, contact, and address. Click Submit to save the recipient details to the form.

Step 5:

Once you have added the payer and recipient details, Enter the Non-Employee Compensation, and any applicable Federal Income Tax Withheld or State Tax Withheld details.

• Box 1 : Nonemployee compensation:Enter the total amount you paid to the independent contractor during the tax year. This should include all compensation for services rendered but not reimbursements for expenses.

• Box 2 : Direct sales:This box is for reporting direct sales of consumer products to the independent contractor for resale. If you sold $5,000 or more of consumer products to the contractor for resale, you’ll need to mark an “X” in this box. This is not common for most businesses.

• Box 3 : It is used to report any payments that are not subject to self-employment tax and are not reportable anywhere else

• Box 4 : Federal income tax withheld:Enter the amount of any federal income tax withheld from the contractor’s payments. This may include taxes withheld due to a backup withholding notice from the IRS or at the independent contractor’s request.

• Box 5,6 & 7: State information :If your state requires 1099-NEC filing, complete the relevant sections. This usually includes your state tax identification number, any state income tax withheld from the contractor’s payments, and the total amount of income earned in the state (filled in Box 5, 6 and 7).

Step 6:

After filling the form click next and view added form.

• Select USPS Mail or eDelivery to send recipient copies. eDelivery is enabled only if the recipient's email ID is provided. A consent request is sent to the recipient , and once approved, the recipient can access their copy.
• Select TIN Match to avoid costly IRS penalties
• Opt for State Filing if required.

Note: State Filing option will be enabled and you can select it only when state filing is required for that particular state. In this case, State filing is not required for this particular state so we can’t select the checkbox for state filing.

Step 7:

Finally, click Action, then Submit Form Now, and proceed with Pay Now to file your form to the IRS. Now your form has been successfully submitted to the IRS.

Step 8:

After submission, navigate to Manage Forms to view and download the recipient copy in PDF format.