I am a sole proprietor LLC and this year I hired consultants. What forms do I need to issue to them if any?

You need to give a 1099NEC (previous a 1099Misc) to anyone you paid $600 or more to for the year. But not to corporations or for merchandise. You send the IRS a copy of the 1099Misc with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31 also.

 

Starting in 2020 they added a new 1099NEC form to replace the 1099Misc.  If you are using the Online Self Employed version or Desktop Home & Business program or Business program you can use Turbo Tax.

 

For Online Self Employed version,

Log into your account

Scroll down to Your Account and click on Show

Click on Create W-2s and 1099s

 

In your return, Anywhere on any screen you see....

Help me prepare and file W-2s and 1099s

Click on it and the side box will open, Then click on Quick Employer Forms in the side box.

Or from the Account Screen it will take you directly to Quick Employer Forms

 

How to create W2s and 1099

https://ttlc.intuit.com/community/forms/help/how-do-i-create-w-2-and-1099-forms-in-turbotax/00/25869

 

Is your LLC an S Corp?   

This is very helpful.  Thank you so much!  I think the part that is tripping me up is "But not to corporations or for merchandise".  If I hired an engineering firm to do work and they are 'Engineers Inc.' does that mean I do not need to issue a 1099-NEC even though I paid more than $600?

It depends whether the consultants you hired were employees or contractors. If they were contractors, you need to issue them a 1099-NEC. Form 1099-NEC will report all nonemployee compensation to independent contractors. 

 

You will provide a copy of 1099 to the IRS, State Department of Revenue, and to the recipient ( the contractor). You will also want to keep a copy for yourself for your records. When sending a 1099 copy to the IRS, also fill and send Form 1096 which reports all 1099 forms issued to contractors and the total dollar amount of payments.

 

If the consultants you hired were employees, then you will need to issue them a W-2. Additionally, if you provided health insurance to your employees, you will also need to issue them a 1095-C which will report their coverage.

 

Please visit How to create 1099 & W-2 in TurboTax for more information on how to create these forms for your consultants.

 

 

Thanks for the response.  I am definitely talking about contractors and not employees.  The thing I am not clear on is if it matters what type of entity the contractor is (LLC, Corporation, etc.)