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Understanding IRS Form 1099-NEC and Form 1099-MISC and Best Practices

Find out everything you need to know about Form 1099-NEC and Form 1099-MISC to avoid compliance violations.

In July 2019, the IRS issued a release draft of a new Form 1099 for use commencing in the 2020 tax year (i.e., in 2021), a Form 1099-NEC to replace the Form 1099-MISC, Box 7 and Box 9 for reporting direct sales of $5,000 or more. This means that commencing in 2021, when reporting with regard to the 2020 calendar year, there are now two (2) different forms to consider (Form 1099-MISC and Form 1099-NEC), as opposed to one. In this topic, we will focus on the new forms, and how to fill them out properly, with an emphasis on some of the confusion that exists. Boxes 3 and 7 of the Form 1099-MISC form, as well as knowing what items go on which form will be discussed. Learn what reconfiguration may be needed of your accounting systems and ensure that you identify vendors that will now require the two different forms (for e.g., rents and lawn maintenance) and what training and communication will be needed to prevent confusion. Issuers need to plan now on how to reconfigure their accounting systems, train and communicate with vendors, using best practices. Those best practices need to include Form W-9 preparation, and addressing backup withholding, and how to avoid penalties. There are hot spots that also need to be addressed, such as how to distinguish employee compensation from nonemployee compensation, addressing Section 530 issues, and spotting when fraudulent forms 1099 are issued implicating Section 7434 claims. Many accounts payable and accounting departments struggle with correctly completing Form 1099-MISC. They often do not know how to issue a 1099-MISC to disregarded entities or how to report special payments such as legal settlements or payments made after the death of an employee. Payable departments often miss deadlines when responding to IRS B notices which can result in penalties. This material will help those responsible for issuing these forms to collect the pertinent information to complete a correct 1099-MISC or 1099-NEC form. Information covered includes new issues for reporting, how to report to disregarded entities, how to report medical payments, and legal settlements and the proper reporting for payments made after the death of an employee. Failing to properly complete and file these forms is a common issue which exists for all payers, both for-profit and not-for-profit entities. The result of issuing incorrect forms is often penalties imposed on the payer. This information will help payers avoid penalties as well as limit the number of corrected forms they will have to prepare.

112 minutes
Course Exam
Certificate of Completion

Training Options

Busy professionals often struggle to keep up with their training, even with matters as important IRS Form 1099-MISC reporting. As with all tax-related topics, issues around Form 1099-MISC reporting are constantly changing, which means a lapse in training can potentially have serious consequences for your business. Lorman Education Services has designed its OnDemand training to work around your schedule. Our IRS Form 1099-MISC program is available in three formats to make it easy for you to stay current on your reporting obligations:

  • As an OnDemand training program: Stream the audio and video components of our IRS Form 1099-MISC training program from any computer or mobile device. Streaming is the best way to get the full immersive experience of the original live presentation, and is also the most convenient. For most devices, no special hardware or software is required. Streaming our program may also qualify you for continuing education credits with your state accountancy board — see below for details.
  • As an audio and reference manual: Alternately, we can arrange to have course content delivered to you on a USB flash drive for use with any compatible device. Files are delivered in PDF and MP3 formats. An additional shipping fee applies.
  • As a downloadable MP3: Start training at any time by downloading the MP3 of our IRS Form 1099-MISC training program. Load up your cell phone or media player and learn on the go.

Whichever way you prefer to complete our programming, you can count on Lorman Education Services’ tax training seminars to deliver the insights you need to manage risk, without taking time away from your busy schedule.

Our Faculty

At Lorman Education Services, we believe online training is only as useful as the instructors delivering it. That’s why we are highly selective in choosing the team we work with. All our programs and other content are developed by recognized experts in their field, many of whom have experience working with top national firms. Your instructor for our IRS Form 1099-MISC training program is Mary H. Angelbeck, an enrolled agent with the IRS and retired member of Ernst & Young’s National Employment Tax/Information Reporting Group. For more information, visit the Faculty tab on this page.

Prerequisites and Continuing Education

“IRS Form 1099-MISC Reporting Requirements and Updates” is available to anyone regardless of their training and professional background. There are no prerequisite courses or other prior requirements. This program will be most useful to any accountant working at or for a business or nonprofit that employs independent contractors. It also provides useful background to anyone with income that falls under the purview of Form 1099-MISC. This includes not just independent contractors but also those who have earned rental income, royalties or Indian gaming profits in the previous tax year.

For many professionals, completion of this program can be put towards their ongoing continuing education requirements. Enrolled agents who complete the course OnDemand qualify for 2.0 credits under Treasury Department Circular #230 Section 10.6(g). The webinar is also eligible for credits with most state accountancy boards. Visit the Credits tab for details or contact a member of our customer response team directly.

Why Is IRS Form 1099-MISC Training Important?

Ongoing training is an important part of due diligence as an accountant at a business or nonprofit. Completion of “IRS Form 1099-MISC Reporting Requirements and Updates” is a quick and convenient way of ensuring your organization is compliant with the most recent changes to regulations around 1099-MISC reporting. As a result, it is an excellent way of managing risk, avoiding penalties and simplifying the reporting process.

Independent accountants who work with businesses that hire contract employees can use this course to serve their clients better. By positioning yourself as an expert in IRS Form 1099-MISC reporting, and backing it up through ongoing training, you can potentially capitalize on the growing need for accountants versed in this issue.

As more businesses hire employees on a contract or freelance basis, this skill set will be increasingly valuable for the accounting and legal professionals who aid them in taxation issues.

Other Useful Training

“IRS Form 1099-MISC Reporting Requirements and Updates” is just one of many OnDemand webinars that address current issues in business tax reporting. As a leader in professional development, Lorman Education Services has one of the largest catalogues of courses online. Other useful programming that addresses 1099 issues from a national perspective include:

  • IRS Form 1099 Reporting: Including Independent Contractor and Litigation Issues
  • 1099s From the Inside Out: Strategies to Make Filing Quick and Painless
  • Merchant Reporting and Form 1099-K

Individual states also have their own reporting requirements for businesses that employ independent contractors. Performing your due diligence requires completing state-level IRS Form 1099 training, as well. To help, our OnDemand programming archive covers topics such as “IRS Form 1099 Reporting: What You Need to Know in California,” “IRS Form 1099 and 1098 Reporting: What You Need to Know in New Mexico” and others that deal specifically with state-level tax issues.

Why Lorman Education Services?

An extensive catalogue of training around IRS Form 1099-MISC reporting and other issues is only one of the reasons why we’ve been the professional’s choice in continuing education since 1987. We offer flexible learning options that work around your schedule without compromising the quality of training. For busy accountants, that’s an important consideration, and one that makes the investment in our courses worth it over the long-term.

With Lorman Education Services, you get world-class training programs delivered directly to you. Best of all, our courses are value-priced, with the option of registering individually or purchasing an All-Access Pass for a full year of unlimited training. Pass holders receive a number of exclusive benefits, including our state-specific credit tracker for managing your ongoing continuing education requirements.

Start Training Today

This exclusive OnDemand training program gives you the latest IRS Form 1099-MISC updates in an accessible, incisive format anyone can benefit from. Learn your obligations as an employer and identify opportunities for streamlining the reporting process. Purchase it in the format of your choice and start training today.

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.



  • Why Did IRS Bring Back Form 1099-NEC?
  • Use of Form 1099-MISC Box 7 From 1983 to 1999
  • PATH Act (2015) and Creation of Different Due Dates for Form 1099-MISC
  • Overview of Key Distinctions Between Form 1099-NEC and Form 1099-MISC

Understanding the New Form 1099-NEC and Required Inputs

  • The Instructions to the New Form 1099-NEC
  • Inputting the New Form 1099-NEC Information
  • Form W-9 Issues- What Is a TIN? Who Completes a W-9?
  • How to Deal With Disregarded Entities?
  • Avoiding Backup Withholding Issues
  • Penalties and Penalty Avoidance
  • Section 7434 and the Fraudulent Form 1099-NEC
  • Best Practices - Reconfiguration, Training and Communication

Understanding the New Form 1099-MISC and Required Inputs

  • The Instructions to the New Form 1099-MISC
  • Inputting the New Form 1099-MISC Information
  • Knowing the Difference Between Box 3 and Box 7
  • Where Do You Report Legal Settlements and Medical Payments?
  • When Are 1099-MISC Forms Due to Recipients and the IRS?
  • Other 1099-MISC Considerations
  • Penalties
  • Best Practices - Reconfiguration, Training and Communication
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More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.


OnDemand Course

This course was last revised on October 29, 2020.

Call 1-866-352-9540 for further credit information.

  • Enrolled Agents 2.0
  • This program qualifies for 2.0 hours of Continuing Education Credit for enrolled agents under Treasury Department Circular #230 Section 10.6(g).

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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More Program Information

Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.


T. Scott Tufts, Esq.

T. Scott Tufts, Esq.


  • Senior tax counsel, CPLS, P.A.
  • Practice emphasizes helping clients who are faced with the filing of certain IRS forms that lead to disputes, as well as tax disputes with the IRS, probate and Federal and state court disputes involving partners and members and estates
  • Practice areas include the handling of IRS tax disputes, expert witnessing, and consultation with partners, members, and their practitioners that pertain to IRS Forms 8082 (notice of inconsistent treatment and erroneous K-1s), as well as IRS Forms 8886 (Reporting of Abusive Tax Shelters), SS-8 (worker classification), 1099-MISC (independent contractors), W-2c/ Form 4852 (Substitute Form W-2 or Form 1099-R); Form 211 (whistle-blowers), Form 3949-A (referral of alleged violations of the tax laws), Form 14242 (suspected abusive tax promotions or promoters), Form 14039 (stolen identity and use of your SSN), Form 14157 (reporting of fraud or abusive tax scheme by preparer), and Form 13909 (reporting of suspect misconduct or wrongdoing of tax exempt or employee plan)
  • Conducts regular seminars and workshops on areas focused on whistle-blowers and the handling of IRS disputes, as well as in the areas of probate and tax, and partnership and LLC matters
  • Wrote several publications: “Evaluating LLC Operating Agreements Containing 'Carte Blanche' Authority and Right to Rely Provisions Purporting to Release Third Parties from Any Duty to Inquire,” Tax Section Bulletin, Florida Bar, Tax Section, Vol. XXIX, No. 2, p. 7, 10-26 (Fall 2013); “AD Global and the Statute of Limitations for TEFRA Partnerships: Will the TMP Ever Have to Stop Looking in the Rear View Mirror for the IRS,” Tax Section Bulletin, Florida Bar, Tax Section, Vol. XXIV, No.2, p.14, pp.25-29 (February 2006); “It Ain’t Over ‘Til It’s Over: When Partnership Tax Vessels Make Ill-Advised Journeys and Wind-Up at Harbor Cove Marina.” Journal of Business Entities (September/October 2004); “What IRS Form 8082 Can Do For You (and to you!) and Your Closely-Held Partnership Now that the IRS’ K-1 Matching Program is Underway,” BNA Tax Management Real Estate, Vol. 19, No. 12 (December 3, 2003); and “Are Single-Member LLCs a Ticking Time-Bomb for Asset Protection?” (Are Single-Member LLCs of Any Utility for Asset Protection after the Florida Supreme Court’s Decision in Olmstead?), ABA Teleconference (August 24, 2010)
  • LL.M. degree in taxation, University of Miami School of Law; J.D. degree, Wake Forest University School of Law; B.S. degree in accounting, Florida State University
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 407860
Published 2020
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