Who Files 1099s

As a business owner, you are obligated to pay taxes which include self-employment, social security, medicare, and income for most. However, it will vary by the state you live in and it is always best practice to consult a Certified Public Accountant (CPA). Agents of Grace Network is not licensed nor qualified to give you advice regarding paying your taxes! We are a resource, sharing resources to keep you informed and inspired to seek the specialized support you need to run your business ethically and with organization. We want to see you grow, thrive and impact all those you are called to in business without overwhelm.

So, if you read our Instagram post recently, as a lifelong learner you are here because you want to know what the deets are regarding paying your contractors, right... you know your business coach or mentor or graphic designer or maybe virtual assistant you hired. Or you may be here because you've been exploring the site or read another blog post and came across this one. No matter how you found this post, you need to read this if you outsource work!

If you paid anyone who is not an employee of your business more than $600 in 2021 (or you are planning to in 2022), then the IRS requires you to report all the money you paid to non-employee contractors during 2021 on a form called a 1099-NEC (non-employee compensation).

The good news is, starting this year: if you paid your contractors via credit card or payment processor (Stripe, PayPal) and not by ACH transfer, payroll, check, Venmo, Cash App, or cash, you DO NOT have to file a 1099-NEC.


The IRS created this new exception so that payment processors now bear the burden of reporting, which makes things a lot easier on business owners (who pay affiliates, contractors, virtual assistants, designers, etc).

To clarify... If you:

  • Paid a service provider (including affiliates)

  • Who is not your employee

  • More than $600 in 2021

  • Via cash, ACH transfer, payroll, direct deposit, check, Venmo, or CashApp

Then you MUST file a 1099-NEC reporting all the money you paid them to the IRS by January 31, 2022.

Agents of Grace Network is re-sharing this helpful and timely information as shared by Amy Nesheim, Attorney and Founder of Artful Contracts.

Need legal support? Legally binding contracts to use in your business? or Trademark support? Visit Amy's resource library HERE.

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