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Independent Contractor Compensation Reporting

2022 – 07/27 Businesses must withhold employment taxes from employees’ wages and report the wages and the taxes withheld to the IRS. But the reporting obligations for workers who aren’t employees can be trickier. While a business isn’t responsible for withholding employment taxes from nonemployee (or independent contractor) compensation, a business that pays more than $600 to an independent contractor must report that compensation to the IRS using Form 1099-NEC, Nonemployee Compensation. There also may be backup withholding. Generally, businesses reporting contractor compensation must file 1099-NECs by Jan. 31 of the year following the payments. Contact us for more details or visit https://bit.ly/3vmcNCp

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