tax tips — January 18, 2021

Freelancers, Meet the New Form 1099-NEC

by Susannah McQuitty

Independent contractor filing a Schedule C with Form 1099-NEC

If you’re a freelancer, independent contractor, or self-employed person who is used to getting Form 1099-MISC every year from clients, heads up! This year’s paperwork is going to look a little different, so today we’re introducing Form 1099-NEC.

What is Form 1099-NEC?

The new Form 1099-NEC is what your nonemployee compensation (aka pay that doesn’t come from an employer) from each client will be reported on instead of Form 1099-MISC. That form was starting to get crowded with items like business payments for rent, prizes and awards, medical and health care, and more, so now the two are separate.

Form 1099-NEC serves a similar purpose as a W2; instead of being a form you fill out and file, it provides income information from your work that you’ll need to report on your tax return.

Do all freelancers or independent contractors get Form 1099-NEC?

Not necessarily—if you earned more than $600 from a client over the course of the year, that client is required to send you a 1099-NEC. That means you might even get more than one.

Do I still have to fill out other freelance and self-employed forms like a Schedule C and Schedule SE if I get Form 1099-NEC?

Yes—your Form 1099-NEC will provide info that you’ll need to add to your Schedule C, which is where you report income and expense details for your business.

You’ll also file Schedule SE, Self-Employment Tax, to pay your Social Security and Medicare taxes. When you file your taxes with 1040.com, we’ll help you complete all the necessary forms to report your freelance income.

What does Form 1099-NEC look like?

Form 1099-NEC is pretty straightforward. Once you get your copy in the mail or online, it will look something like this:

example of a Form 1099-NEC

Can I file freelance, independent contractor and self-employment taxes with 1040.com?

Absolutely! We’ve designed our tax-filing walkthrough to be smart, simple, and straightforward for everyone, including those who work independently. Plus, you’ll get our flat $25 rate—a great deal for anyone filing a Schedule C, since that could bump you up to the priciest tiers on other tax-filing websites!

Ready to get started? Just sign up or log in as soon as you get your Forms 1099-NEC, and we’ll guide you through the process.

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