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A Key Form Change to be on the Lookout for

We want everyone to be aware of a key change to one of the tax forms that you are accustomed to seeing in years past. The form you want to be on the lookout for is the Form 1099-Misc which is the form that you receive if you performed certain service and received payment from a business. So when you start receiving your tax forms for 2020 instead of a Form 1099-Misc you may now receive Form 1099-NEC, Non-Employee Compensation. This new form just isolates the money you received for certain services from businesses where as in years past the 1099 would include other items such as rents received, royalties, and fishing boat proceeds.

Below is a list of payments where you would still receive the Form 1099-Misc instead of the Form 1099-NEC:

• At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.

• At least $600 in the following:
 Rents.
 Prizes and awards.
 Other income payments.
 Generally, cash from a notional principal contract to an individual, a partnership or an estate.
 Any fishing boat proceeds.
 Medical and health care payments.
 Crop insurance proceeds.
 Payments to an attorney.
 Section 409A deferrals.
 Nonqualified deferred compensation.

Below is an example of the new 2020 Form 1099-NEC:

Please consult your tax advisor on all the above information.

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