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Easily Said & Done

A Taxing Time

Published 12 months ago • 2 min read

If you live in the US and have already filed your 2024 taxes, congratulations.

I spent the better part of the weekend trying to get my own taxes completed and dealing with mom's taxes, too, which are more complex than mine.

In dealing with my own taxes, I ran into confusion over the new 1099-Ks vs. 1099-NECs so I thought I'd share a few pointers to clear up any questions and provide guidance.

1099-NECs

  • Businesses must issue this form for non-employee compensation of $600 or more in the calendar year. This applies to payments made to independent contractors, freelancers, and other service providers.
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  • During the onboarding process, collect W-9s from anyone to whom you expect to issue a 1099-NEC, so you don't need to scramble for it later. This document provides the information you need to complete their 1099-NEC, including their tax ID number and official name and address.
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  • The deadline for issuing 1099-NECs is January 31st of each year for the prior tax year, but if you failed to do it this year, better late than never.
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  • ​1099online.com offers a relatively simple and low-cost way to get this done if you don't have a bookkeeper, accountant, or financial consultant to help you.

1099-Ks

  • Third-party payment platforms like PayPal and Venmo are required to issue a 1099-K if your gross payments exceed the annual threshold, which decreases each year until it hits $600. In 2024, the threshold is $5,000. For 2025, the threshold is $2,500.
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  • However, clients paying you $600 or more must still issue a 1099-NEC, even if you receive a 1099-K from a platform recording the same payment(s). Reconciling these forms is vital to avoid double-reporting your income.​
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  • Make it a practice to review your income and track payment methods to ensure the documents you receive each year are accurate.
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  • Remember: Any transaction, bank, and/or processing fees charged by third-party payers are fully tax-deductible as business expenses, so track this information separately.

Preparing your taxes doesn’t have to be stressful if you have a good bookkeeping system that you feel confident managing on your own or in concert with a financial consultant, such as a bookkeeper or accountant.
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The trick is to get into the habit of reviewing your financial information on a regular basis and creating an onboarding process for clients and consultants that ensures everyone has the information and paperwork necessary to issue the correct forms later on.

​Reach out to me if you'd like some help mapping out a system that works for you and your business.
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Until next time,

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P.S. If you missed it, last week I was Discounting Discounts.
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“
Lauren is such an incredible coach for established and emerging entrepreneurs. She mixes heart with wisdom and tailors her approach for wherever you are in your journey. So many breakthroughs and things to incorporate going forward. It was truly an honor to learn from her!
— Vinny Anand, Co-Founder, FortyLove
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Easily Said & Done

Why grow your business alone?

I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?

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