Regardless of how your business is classified by the IRS, whether it is a partnership, corporation, you may need to file Forms 1099-NEC or W-2 for the 2023 tax year if you have employees and independent contractors.
Not sure where to start? You’re in luck! Our sister product, TaxBandits, is the 1099 and W-2 expert!
TaxBandits has you covered, we support the year-end forms you are required to file. This includes W-2, 1099-NEC, 1099-MISC, and Forms 940/941.
Here is a helpful rundown of each form to get you started!
What is Form W-2?
The Form W-2 is a wage tax form that reports the wages you paid to your employees and the taxes that you withheld from their pay. This includes social security, Medicare, and income taxes.
This form is required to be completed and submitted to the SSA on or before January 31st. Employers also have the responsibility to furnish their employees with a copy of their Form W2. These copies must be postmarked by January 31, 2024.
Your employees need a copy of their Form W-2 in order to complete their own personal taxes and properly report their income to the IRS.
What is Form 1099-NEC?
Businesses should report all non-employee compensation using Form 1099-NEC for the 2023 tax year. The deadline to file and distribute Form 1099-NEC is also January 31, 2024.
Not sure about the difference between an employee and an independent contractor?
An employee is included on your payroll, you withhold taxes from their wages. They work for your business on a permanent basis. You provide them with the tools they need to do their job.
An independent contractor is an individual or business that your business hires to complete work. They are not on your payroll and don’t work for you permanently. They most likely supply their own tools and equipment needed for their work. If you pay these individuals more than $600 in a tax year, you will need to file a Form 1099-NEC for them.
What is Form 1099-MISC?
While it is no longer used to report non-employee compensation, businesses should use
Form 1099-MISC to report an assortment of payments that are not related to non-employee compensation.
Some of these include:
Royalties or broker payments in lieu of dividends exceeding $10.
Awards or prizes
Medical and healthcare payments
Fishing boat proceeds
Payments made to attorneys
Crop insurance proceeds
The deadline to complete Form 1099-MISC and furnish copies is January 31, 2024!
TaxBandits simplifies your year-end filing!
With the TaxBandits bulk upload feature, you can easily upload all your employee and recipient information in batches for faster filing. TaxBandits also helps you fulfill your federal and state e-filing requirements.