What happens if I don’t file 1099 NEC?

If you are required to file a 1099-NEC form and you fail to do so, you may face penalties and other consequences. The 1099-NEC form is used to report nonemployee compensation, such as payments made to independent contractors or freelancers, to the IRS. If you fail to file the 1099-NEC form by the due date or if you file an incorrect or incomplete form, the IRS may assess penalties, including:

Late filing penalties: If you fail to file the 1099-NEC form by the due date, you may be subject to a penalty based on the number of days the form is late.

Inaccurate filing penalties: If you file an incomplete or incorrect 1099-NEC form, you may be subject to a penalty based on the number of errors on the form.

Failure-to-file penalties: If you fail to file the 1099-NEC form altogether, you may be subject to a penalty based on the amount of nonemployee compensation you failed to report.

In addition to these penalties, failing to file the 1099-NEC form can also trigger an IRS audit, which may result in further penalties and fees. It's important to ensure that you file the 1099-NEC form accurately and on time to avoid these consequences.