1099 Best Practices for Your Nonprofit | The Charity CFO

1099 Best Practices for Your Nonprofit | The Charity CFO

Nonprofits rely on the generosity of donors and volunteers to support their mission and achieve their goals. But, just like for-profit businesses, nonprofit organizations must also navigate complex tax laws and regulations to remain compliant. One of the key areas for nonprofit compliance is the correct use of 1099 forms.

You see, in most cases, many nonprofits don’t have the resources, capacity, or even the need to have full-time employees. It is expensive and untenable since you have to deal with costly taxes and contribute to social security, unemployment insurance, and other benefits. In such cases, hiring independent contractors and vendors is always a great option for most nonprofits. This is where form 1099 comes in.

Form 1099 is a miscellaneous IRS information form used to report the payments you make to vendors, independent contractors, freelancers, and other non-employees. Nonprofits must understand various 1099 rules and be able to properly file these forms each year with the IRS to remain compliant.

But what are the 1099 rules for nonprofits, and what are some best practices when it comes to filing these forms? Here’s a comprehensive guide on everything you need to know.

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