Form 1099 and Worker Classification Issues

Author: Steven D. Mercatante

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

With constant revisions to the law and the related rule changes, it is crucial to remain up-to- date with the current information reporting laws to avoid those dreaded penalties and interest not to mention the time consumed to make corrections. Whether you are new or seeking an update this course will provide CPA’s, Accounts Payable, Payroll, and Tax with plain English guidance to help minimize 1099 mistakes while breaking down the toughest 1099 payee and payment reporting situations. In this course, industry expert and corporate tax attorney Steven D. Mercatante Esq. takes a look at some of the more common problems experienced by CPA’s, accounts payable, and tax departments related to documenting, validating, and reporting payee information on IRS Forms 1099. He identifies key issues and best-practices for addressing them.

Publication Date: April 2022

Designed For
If you report payments on Forms 1099, supervise 1099 compliance and want to stay on top of changes in the law, or are a CPA and would benefit from assistance validating Forms 1099 this course is a must.

Topics Covered

• Determine which 1099 to use and watch out for key trouble spots on the most commonly filed Forms 1099
• Why worker classification issues are impacting your 1099 vendor payments in 2022
• Tricky 1099 situations: rent, leases, prizes and awards, recognize which boxes to report attorney and settlement payments, decode what "damages" payments mean for AP purposes, identify the difference between box 6 and 1099-NEC box one medical service provider payments, discover when the reporting does not always follow the payment, determine which boxes to report non-qualified deferred compensation
• W-9 document validation best practices with a focus on situations when multiple names are provided, handling undocumented payees, exempt organization payees, and IRS TIN Match Program best practices
• The reportable payee when you pay sole proprietors, LLCs, payee's merged or bought by another, S-Corps, agents, or middlemen
• Valuable tips for E-Filing and for using the Combined Federal/State Filing Program
• Backup withholding guidance designed to make your job easier, including a detailed discussion of the Form 1099-MISC and Form 1099-NEC's Box 4 versus usage of Form 945
• What's new
• The Form 1099-NEC
• 1099-MISC box one issues
• 1099-MISC box two issues
• 1099-MISC box three issues
• 1099-MISC box six issues
• 1099-MISC vs. 1099-NEC director's payments
• The Form 1099-NEC vs. 1099-MISC
• The "Other 1099s"
• 1099 filing starts with the W-9
• 1099 filing data validation basics
• Always validate claims of non-reportability
• Always validate LLCs
• 1099 filing data validation
• Watch out for 1099 filing and the middleman
• Protect yourself

Learning Objectives

• Recognize how to determine which 1099 to use and watch out for key trouble spots on the most commonly filed Forms 1099
• Describe why worker classification issues are impacting your 1099 vendor payments in 2022
• Identify tricky 1099 situations
• Identify W-9 document validation best practices with a focus on situations when multiple names are provided, handling undocumented payees, exempt organization payees, and IRS TIN Match Program best practices
• Recognize how to identify the reportable payee when you pay sole proprietors, LLCs, payee's merged or bought by another, S-Corps, agents, or middlemen
• Identify how to use valuable tips for E-Filing and for using the Combined Federal/State Filing Program
• Recognize how to receive backup withholding guidance designed to make your job easier, including a detailed discussion of the Form 1099-MISC and Form 1099-NEC's Box 4 versus usage of Form 945
• Identify the estimated tax gap amount per year
• Identify the test that is popular in multiple states with respect to worker classification
• Identify a 1099-MISC Box 2 issue
• Identify the U.S. federal income tax withholding percent on payments of U.S. source income (unless an exception exists)
• Identify the tool that is especially valuable for reducing Corrections, B-Notices and responding to Proposed Penalty Notices

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None