Form 1099-NEC
Definition
The US information return used to report non-employee compensation paid to independent contractors and other non-employees. Businesses file it for qualifying payments and furnish a copy to the recipient by the deadline.
Why it matters
Paying contractors without filing the right 1099 can lead to penalties and backup-withholding issues. Collecting a Form W-9 upfront is what makes year-end 1099 filing straightforward.
Related Terms in US Tax
Form 1099-INT
A US information return reporting interest income of a threshold amount or more paid during the year, typically issued by banks and other payers to the recipient and the IRS.
Form 1099-DIV
A US information return reporting dividends and certain distributions paid to a taxpayer during the year, used by recipients to report investment income on their return.
Schedule C
The US tax schedule a sole proprietor or single-member LLC uses to report the income and expenses of a business, with the resulting profit or loss flowing to the owner's individual return.
Schedule SE
The US schedule used to calculate self-employment tax — the Social Security and Medicare contributions owed by self-employed people on their net earnings.
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