Posted: Feb 21, 2024
Category: The Musician Business
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**Guest post written by Matt Santry, founder of www.WellPaidMusician.com.
"The ARP required third party settlement organizations (TPSOs), which include popular payment apps and online marketplaces, to report payments of more than $600 for the sale of goods and services on a Form 1099-K starting in 2022.” - www.irs.gov/newsroom
Form 1099-K was introduced with the American Rescue Plan. The ARP required third party settlement organizations (TPSOs) e.g. PayPal/Venmo, to report payments of more than $600 for the sale of goods and services on a Form 1099-K starting in 2022.
The $600 threshold has been postponed. For the 2023 tax year, the threshold is $20,000 or 200 transactions. So unless you’ve paid each individual contractor 200 times or $20K +, then you're going to have to issue 1099-NECs for 2023.
Here’s how you do it.
Any contractor you pay $600 or more in a calendar year has to be reported to the IRS on Form 1099-NEC. This could be anyone from a musician you hire in a gig, a sound tech, a producer, a videographer, any non-employee, you pay at least $600 for services in a year.
This is what the 1099-NEC form looks like 👇
Have the contractor fill it out and send it back to you.
Related Blog Posts:
+The Importance of Gig Contracts (free template)
+Navigating the Modern Music Industry: A Guide for Independent Artists
+Musician's multiple streams of income. Top 10 ways to make money on your music
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