As the Statista Research Department reports an 85.2% increase in the number of independent contractors across the US from 2021 to 2022, NumberSquad announces a new service to help small businesses prepare 1099-NEC contractor forms.
More details can be found at https://numbersquad.com
As of 2020, businesses are required by the IRS to complete the 1099-NEC form for non-employee compensation which amounts to at least $600 per tax year. This can include payments made to contractors, vendors, and freelancers – but there are some exceptions, which can make the filing process complex. As a certified tax preparation company, NumberSquad can ensure that all payments are accurately reported and 1099-NEC forms are filed on time.
“An IRS Form 1099 reports the income individuals earned over the course of the year,” explains a company representative. “The most common 1099 forms are issued to independent contractors, sole proprietors, freelancers, and self-employed individuals.”
Whether part-time or full-time employees, workers who are not on the payroll will require the 1099-NEC form in most cases. The deadline to issue the forms to employees and file them with the IRS is January 31 each year.
As part of the new service, NumberSquad will review all relevant bank accounts, checks, EFT, and direct deposit payments for those employees who qualify under the 1099-NEC requirements. It will collect taxpayer ID numbers – which can be an individual’s social security number, a taxpayer ID number, or an employer ID number – generally, obtained from the W-9 forms.
While the 1099-NEC form will be required for most independent contractors, freelancers, vendors, and sole proprietors, NumberSquad explains that there are some exceptions businesses should be aware of. For example, rent payments or attorney fees which do not exceed $600 per tax year will be reported using the 1099-MISC form. Further, using reimbursement processors such as Justworks will also eliminate the need for 1099-NEC forms, as those will be filed by the reimbursement processing company.
With the announcement, NumberSquad continues to enhance its range of external finance and account management solutions for small businesses. Founded in 2019 as an all-in-one venue for entrepreneurs and SMBs, the firm provides bookkeeping, tax prep, and payroll processing.
Interested parties can learn more at https://numbersquad.com
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