Happy 2024! A new year is an exciting time for business. New opportunities. New ways to help customers and clients. But this is also the time where business owners need to put things together for the previous year's taxes.

Many new business owners aren't aware that the first forms must be filed in January. The first things they'll need to file are 1099s to individuals and most companies who received at least $600 in non-employment income or other payments during the year. Types of payments include services provided, commissions, rent, interest, dividends, and other similar payments. Vendors that are incorporated (e.g, either a C-Corp or an S-Corp) will not require a 1099, but sole proprietors, independent contractors, partnerships, and most LLCs will.

1099-NEC - For Nonemployee Compensation. This is intended for contractors or other service providers who were paid for their work, but are not considered employees and who won't receive a W2 for their services. The company is required to have copies submitted to the individual or vendor paid as well as to the IRS by January 31, 2024.

1099-MISC - Used for other miscellaneous payments such as rents, prizes and awards, awards paid to an attorney, and other payments. The company is required to, in most cases, have copies submitted to the individual or vendor paid by January 31, 2024; however, if there are "substitute payments in lieu of dividends or interest" or "gross proceeds paid to an attorney, they aren't due until Feb 15, 2024. The IRS must receive their copy by February 28, 2024 if provided on paper or by April 1 if eFiled.

Those are the most common 1099 filings for businesses, but other forms include:

1099-INT - For taxpayers who've earned more than $10 in interest in the tax year. Businesses that send these out are typically banks, brokerage firms, or other investment firms.
1099-DIV - For taxpayers who received dividend income during the tax year, usually as cash payments paid to investors for owning stock or equity shares.
1099-B - Goes to taxpayers listing transactions from a broker (e.g., sales from stocks, commodities, and other securities are the most common; however, it also includes bartered transactions through an exchange.)
1099-G - Sent by local, state, and federal government to recipients of refunds or some benefits like unemployment.
1099-K - Issued by payment companies, online marketplaces, or payment apps for goods or services provided during the year. A $5,000 threshold is planned for 2024.
1099-PATR - These report cooperative patronage dividends and dividend payments associated with farms.
1099-R - Taxpayers who receive pension distributions or payments from a taxable retirement plan or IRA will receive this form.). This can also apply to certain annuities and life insurance contracts.
1099-S - Provided for real estate transactions to show realized proceeds and gains from selling commercial/residential properties or land.
1099-SA - Sent to individuals who receive distributions from health or medical savings accounts as well as Medicare Advantage Accounts.

If you're a self-employed taxpayer who earned less than $600, you may not receive a 1099–NEC; however, you're still expected to report that money as income on your tax return. If you've just started a side business or you've been in business a while and some of this is new to you, please reach out to us at Brightleaf Consulting Group. We're happy to help you learn more about what's required for small businesses and put your mind at ease about what to file and when!

- John Thrush