Understanding the 2024 IRS 1099 Requirements: What Businesses Need to Know
Here’s a breakdown of what you need to know about the 2024 IRS 1099 forms:
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Who Needs to File a 1099 Form?
If your business paid $600 or more to an independent contractor, freelancer, or non-incorporated service provider in 2024, you must file a 1099-NEC. These payments often include services such as graphic design, consulting, or bookkeeping.
Key Points to Remember:
- Payments to corporations (INC.) generally do not require a 1099, except for attorneys and medical providers.
- Payments made via credit card or payment platforms like PayPal or Venmo are reported separately by the payment processor using Form 1099-K.
Form Updates for 2024
The IRS has made some adjustments to simplify compliance:
- 1099-NEC: Continues to be the primary form for reporting non-employee compensation.
- 1099-K Thresholds: Payment platforms are now required to report transactions totaling $600 or more annually, regardless of the number of transactions.
- Digital Filing Requirements: Businesses issuing more than 10 1099s must file electronically, down from the previous threshold of 250.
Deadlines to Watch
Timely filing is critical to avoid penalties.
- January 31, 2025: Deadline to send 1099-NEC forms to recipients and file them with the IRS.
- February 28, 2025: Deadline for paper filing other 1099 forms.
- March 31, 2025: Deadline for electronic filing of other 1099 forms.
Late filings can result in penalties ranging from $50 to $290 per form, depending on the delay.
Source: https://www.irs.gov/instructions/i1099mec#en_US_202401_publink100061169
