When Does Your Business Need to Issue a 1099-NEC Form?

Running a business usually involves making tons of payments each day, week, or month. Apart from recurrent expenses, inventory purchases, and wages, most modern businesses also make a diverse range of payments to independent contractors, handymen, and freelancers for services provided.

These payments affect your bottom line, which is why the IRS (Internal Revenue Service) demands that businesses document these payments. Before 2021, this used to be done using the form 1099-MISC, which has since been replaced by the 1099-NEC Form.

But if you’re like most other business owners, you probably have various questions about the new form, if you should use form 1099-NEC, why, and how.

Read for answers to these burning questions as well as when your business needs to issue a 1099-NEC form.