The 1099-NEC replaced the old Form 1099-MISC for reporting non-employee compensation starting in 2020. Any business that paid you $600 or more during the tax year must send you this form by January 31. It shows the total amount you were paid as a non-employee, along with tax withheld (if any). This income must be reported on your tax return as self-employment income.

Businesses are required to issue 1099-NECs by the January 31 deadline. You can use income records to estimate the amounts and file on time. Just be sure to hold onto any late 1099-NECs you receive. You may need to file an amended tax return if the income amounts differ from your estimates.

Source: 1099-NEC Form Instructions 

Since taxes aren’t withheld from 1099 income, it’s a good idea to set aside money for your tax bill. Many taxpayers owing self-employment tax get stuck with a big payment on tax day. Set aside 25-30% of your 1099-NEC earnings to cover federal income tax and self-employment tax.

Form 1099-NEC must be filed with the IRS by January 31 each year for payments made the previous tax year. You must also provide copies of the 1099-NEC to recipients by this date.

To complete Form 1099-NEC, you’ll need the contractor’s name, address, taxpayer identification number (TIN) or Social Security number, and the total amount you paid them for the tax year. You’ll also need your own business details like name, address and employer identification number (EIN).

Yes – failing to file a correct 1099-NEC by the due date can result in penalties from the IRS. The penalty starts at $50 per missed 1099, with additional penalties for intentional disregard.