A Step-By-Step Guide to Completing Form 1099-NEC with TaxBandits

E-file Form 1099-NEC by January 31st with this helpful guide!

Form 1099-NEC is the most commonly filed form in the IRS 1099 Series. This is used to report payments of $600 or more that were made to an independent contractor, freelance worker, or other non-employee for services rendered. 

The deadline to file this form with the IRS every year is January 31, 2023. This is also the deadline to distribute copies to the payment recipients or “payees”. 

Here is a simple, step-by-step guide to filing this form using TaxBandits. 

Sign in to your TaxBandits account and follow the instructions below!

Step 1: Getting Started in TaxBandits

Once you’ve signed in to TaxBandits, select ‘Start New’ in the upper right corner:

Select ‘Form’:

Select ‘Form 1099-NEC’:

Verify the tax year you are filing for, if you are filing for the current tax year this will be 2022. 

Choose your preferred method for entering the form information. If you are filing many forms, we recommend that you bulk upload data using our template, or integrate with your accounting software.  

If you are just filing a single Form 1099-NEC at a time, click ‘Start Now’ under ‘Manual Data Entry’:

Step 2: Fill Out Form 1099-NEC

Begin by providing the business information. You can enter the information manually, or you can select a business from your address book by clicking ‘Select/Add Business’. 

You have the option to choose an existing business from your address or add a new business to file for. 

If you have already added the recipient to the business, you can search for the employee by name or SSN or by selecting the ‘Address Book Lookup’ icon or by adding the Employee Name or SSN in the search bar. If you have not added the recipient, you can manually enter the data in each line. 

If you choose to look up the recipient from your Address Book, you can select them here. 

Check the box if you want to provide the recipient with Online Access to their form. 

The account number is required if you have multiple accounts for a recipient for whom you are filing more than one 1099 series form.

Please note that the filing information below is based on IRS guidance, for a complete overview of 

Box 1: Nonemployee Compensation

Enter nonemployee compensation of $600 or more. Include fees, commissions, prizes, and awards for services performed as a nonemployee, other forms of compensation for services performed for your trade or business by an individual who is not your employee, and fish purchases for cash. 

Include oil and gas payments for a working interest, whether or not services are performed. Include expenses incurred for the use of an entertainment facility that you treat as compensation to a nonemployee. Federal executive agencies that make payments to vendors for services, including payments to corporations, must report the payments in this box. 

Box 2: Payer made direct sales totaling $5,000 or more of consumer products to recipient for resale

Check the box if it applies. 

Box 4: Federal Income Tax Withheld

Enter backup withholding. For example, persons who have not furnished their TINs to you are subject to withholding on payments required to be reported in box 1.

*You can click ‘How to File Form 1099-NEC?’ to watch the help video. 

Boxes 5–7. State Information

These boxes are provided for your convenience only and need not be completed for the IRS. Use the state information boxes to report payments for up to two states. If you withheld state income tax on this payment, you may enter it in box 5. In box 6, enter the abbreviated name of the state and the payer’s state identification number. In box 7, you may enter the amount of the state payment. 

If a state tax department requires that you send them a paper copy of this form, use Copy 1 to provide information to the state tax department. Give Copy 2 to the recipient for use in filing the recipient’s state income tax return. 

If you need to report information for more than one state, select ‘Add New State’. Contact your state DOR for specific reporting information.

When the form is completed, select ‘Save and Continue’. 

You will be directed to verify the USPS Recommended Address, ensure the address for the recipient is accurate, and select ‘Continue’. 

Step 3: Completing your Order

Now you can choose to: 

  1. Begin a new form 
  2. Edit this form
  3. Preview this form
  4. Adjust your services 
  5. Continue filing

Next, review the information you entered on the 1099-NEC, then click ‘Continue’ to proceed.

Select the business(es) you are filing for, review your order details, then click ‘Complete Your Order’. When using prepaid credits, there is no need to enter or process a credit/debit card to file. However, if you click the “x” icons, you will be prompted for credit card information instead. 

Step 4: Transmitting your Form 1099-NEC to the IRS

Now, select ‘Confirm and Transmit’:

Now, you can see that your form is being processed and sent to the IRS, this page also provides more information on your next steps for this form!

Do you need to file other 1099 forms for the 2022 tax year? Check out this blog for an overview of more common 1099 forms!

Ready to create your free TaxBandits account and get started? 

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