Updated: Jan 25
Many professional truck drivers choose to contract their services to carriers and fleets. The 1099 is a tax form which allows the IRS to track any payment given by a company to independent contractors for their services.
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Where is my Form 1099-NEC?
Form 1099-NEC will now be used to report non-employee compensation for tax filing year 2021 and on. Previously Form 1099-MISC was used to report this information. This form must be issued to all independent contractors by January 31, 2022. This puts the responsibility on the carrier or fleet to provide the 1099 form to its contractors. Even if you do not receive the 1099, you will still need to report the income on your tax return.
Tracking Down Form 1099
If you have trouble tracking down this form from your fleet, there are several things you can do. First, you can give the fleet or carrier a call. Typically, the group that handles your paycheck every week or month will issue your Form 1099. Be sure to track this information down at the beginning of February so you are ready to submit your forms and paperwork to ATBS in order to file on time.
Second, you can ask the IRS for older 1099s and they can typically supply this documentation for the past 10 years. To make this request, you will need to complete Form 4506-T. The good news is that this service is free.
Finally as a last resort, you can estimate your 1099-NEC income. Do so by reviewing your end of year pay stubs issued by your fleet or carrier. A simple amend process is available if you overestimated your income. Remember, the IRS does not like it when you underestimate earnings, and may impose penalties for doing so.
ATBS clients have their income reported or downloaded every month so the tax filing process is streamlined. The Tax Organizer walks ATBS clients through the tax process and ensures every owner-operator tax deduction is considered.
Notice, If you are a corporation, there is a possibility that you will not receive a 1099-NEC; advice with your carrier if that is the case. The IRS exempts corporations from receiving the 1099 form because these entities are already subject to strict state and federal reporting and administrative requirements.
Issuing a 1099
Some independent contractors will pay others to help them run their business. If you paid someone more than $600 in 2021, then you will need to file a 1099 for that person, and send a copy of this to the IRS by February 28th, 2022 (or March 31st, 2022 if you file electronically).
A good bookkeeping practice to adhere to is to file a signed and completed W-9 for each contractor you hire. This provides the information you need for filing Form 1099 with your contractor and the IRS.
ATBS clients have a dedicated team of bookkeepers who can properly categorize any payments made to independent contractors. Be sure to work with your ATBS business consultant to successfully file all forms with the IRS and independent contractors in a timely manner.
Form 1099 is an important element in every independent contractor’s life. Keep an eye out for it in January and ensure that all of your paperwork is organized for your tax preparer in February.
ATBS prepares taxes for more than 15,000 professional drivers every year. We help owner-operators keep their money where it belongs -- in their pockets. Give ATBS a call today with all your tax-related questions at 866-920-2827.