@luciekitty04 wrote:
@Hal_Al , they want me to fill out a W-9. Is that a 1099-Misc or 1099-NEC? 2020 is the first year I have been asked by this company to fill out a W-9. They said that the rules changed and if you earn more than $600 in points for gift cards, you need to fill it out.
Here is the flow of information:
1. You provide the payer with a W-9 that identifies you and gives your SSN.
2. At the end of the year (2020 or 2021), the payer may issue a 1099 reporting what they paid you. They are required to issue a 1099 if they pay more than $600, but they can choose to issue a 1099 if they paid less. 1099s must be sent by January 31. It could be a 1099-NEC or a 1099-MISC.
3. When you prepare your tax return, you use information from the 1099 to report your income to the IRS. You are expected to report all your income, even if not reported on a 1099.
a. If the money is reported on a 1099-MISC, the IRS will usually allow you to report it as hobby income.
b. If the money is reported on a 1099-NEC, the IRS will usually presume that it is self-employment income. If you believe this is hobby income and report as such, the IRS will usually request further explanation from you.
You don't actually send the 1099 to the IRS, you use the information to prepare your tax return and keep the 1099s for your records.
