I gather that 1099s are for workers who are not "in house." Should BOTH independent contractors and self-employed freelancers receive 1099s, or are the forms different? What are the differences between contractors vs. freelancers when it comes time to file taxes?
Thanks so much for your expertise.
There is no difference. A contractor and a freelancer are both considered to be "self-employed".
Generally for non-employee compensation, the contractor/freelancer will receive a 1099-NEC (new form as of 2020). Both will file a Schedule C as part of their 1040 tax return.
The TurboTax products Self-Employed for Online and Home & Business for CD/download are best suited for this because they both let you list as many expenses as warranted.
Is a 1099-NEC necessary if the independent contractor received less than $600 for the year?
No. You should be getting the w9 filled out for each contractor before paying them, See About Form W-9, Request for Taxpayer Identification Number (TIN) and Certification.
Instructions for Forms 1099-MISC and 1099-NEC, Miscellaneous Income and Nonemployee Compensation,
This takes us to Box 1 on page 10 which states:
What is NEC? If the following four conditions are met, you must generally report a payment as NEC.
• You made the payment to someone who is not your employee.
• You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
• You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
• You made payments to the payee of at least $600 during the year. .