# 1099 Misc vs 1099 NEC



## nosurgenodrive (May 13, 2019)

This feels like the beginning of the end of the salad days of gig work. Seems like a setup for **** IC out of deductions in 2022 and beyond. I'm open to being paranoid here. Convince me otherwise.


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## oldfart (Dec 22, 2017)

The 1099 NEC is how income paid to Independent Contractors will be reported to the IRS, (instead of 1099 MISC) Both 1099s report income, not expenses, The expenses are yours to report (and justify) against that income, Nothing has changed there

However, Uber doesn't pay us (we pay them) They use the 1099K, which is altogether different


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## Seamus (Jun 21, 2018)

Yeah as @oldfart said for those that get 1099 misc the 1099 nec is no change at all. DD,GH,PM,Instacart, etc.etc. all use 1099 misc so now they will use 1099 nec.

Uber and Lyft are the only 2 gigs using the 1099K scam. What would be interesting is if the IRS finally stopped U/L from considering themselves payment processors and made them convert to the 1099 NEC . Rideshare is specifically mentioned as an example in some of the literature I've seen. THAT would be big for U/L and drivers who don't get a 1099K and don't declare their rideshare income! That would lower the income threshold from 20k to $600 for drivers to get a 1099 NEC. For drivers already being honest it's no change except the GROSS would be the GROSS paid to you and not include fees.


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## oldfart (Dec 22, 2017)

Seamus said:


> Yeah as @oldfart said for those that get 1099 misc the 1099 nec is no change at all. DD,GH,PM,Instacart, etc.etc. all use 1099 misc so now they will use 1099 nec.
> 
> Uber and Lyft are the only 2 gigs using the 1099K scam. What would be interesting is if the IRS finally stopped U/L from considering themselves payment processors and made them convert to the 1099 NEC . Rideshare is specifically mentioned as an example in some of the literature I've seen. THAT would be big for U/L and drivers who don't get a 1099K and don't declare their rideshare income! That would lower the income threshold from 20k to $600 for drivers to get a 1099 NEC. For drivers already being honest it's no change except the GROSS would be the GROSS paid to you and not include fees.


I dont see it as a scam, or if it is a scam, Its one I approve of. or maybe I should say, its something Im used to.

I once had a business renting vacation homes and condos. I sent invoices to my customers through paypal, and my customers used their credit cards to pay. Paypal collected the money, took their fees and the rest was mine. Paypal would send me (and the IRS) a 1099K if I had more than $20000 income and at least 200 transactions in a year

I dont see Uber/Lyft as any different. I give folks rides from point A to point B, Uber and Lyft find me those riders,, and they collect the money. They take their fees and send me the rest. (and a 1099K)

I think if the IRS had any sense they would require a 1099k for all rides and all drivers. The scam, if there is one, is the driver that dosent get a 1099K and doesn't report his income


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## Seamus (Jun 21, 2018)

oldfart said:


> I dont see it as a scam, or if it is a scam, Its one I approve of. or maybe I should say, its something Im used to.
> 
> I once had a business renting vacation homes and condos. I sent invoices to my customers through paypal, and my customers used their credit cards to pay. Paypal collected the money, took their fees and the rest was mine. Paypal would send me (and the IRS) a 1099K if I had more than $20000 income and at least 200 transactions in a year
> 
> ...


It's a matter of opinion, and I respect your view on it. However, I still see Uber/Lyft use of the "payment processor" status as an abuse of the classification because of the way they operate and the amount of control they have over the drivers. While some gigs such as Arbnb are a legitimate use of the payment processor classification, there is a world of difference between how Arbnb operates and interacts with it's members, and the way U/L operates. The operating model exerts far too much control over drivers to simply be "payment processors". They clearly maintain drivers are IC's and the definition of how they pay drivers is a match for 1099 NEC.

The logic that U/L are simply "payment processors" is a bridge too far for me. Only my opinion.


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## Wildgoose (Feb 11, 2019)

Seamus said:


> Yeah as @oldfart said for those that get 1099 misc the 1099 nec is no change at all. DD,GH,PM,Instacart, etc.etc. all use 1099 misc so now they will use 1099 nec.
> 
> Uber and Lyft are the only 2 gigs using the 1099K scam. What would be interesting is if the IRS finally stopped U/L from considering themselves payment processors and made them convert to the 1099 NEC . Rideshare is specifically mentioned as an example in some of the literature I've seen. THAT would be big for U/L and drivers who don't get a 1099K and don't declare their rideshare income! That would lower the income threshold from 20k to $600 for drivers to get a 1099 NEC. For drivers already being honest it's no change except the GROSS would be the GROSS paid to you and not include fees.


That makes more sense. Before Uber and Lyft used 1099K which is for IC who makes more than 20K for a year. Because of this 1099K form, some Uber and Lyft drivers believe that they are not required to file Tax claim. But which is not true. According to IRS, those who makes more than $600 are required to file Tax claim. Now 1099 Nec solves this issue. Now Uber and Lyft will have to issue 1099 NEC to each and every drivers who make more than $600 and the drivers are required to file TAX claim.
That makes no more misunderstanding on filing TAX. IRS has fixed the hole.

Plus this move will make some drivers worry who have been double dipping. They said before that they are not required to file Tax claim since they would make less than 20K. Some of IRS agents might be watching this forum contents. Be careful guys... They want to figure out how drivers would cheat on Tax. &#128514; &#128514; &#128514;


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## nosurgenodrive (May 13, 2019)

It just feels like a preliminary move to create a gig worker bracket with less deductions. They always roll these things out slowly and in stages. In this situation they'll be able to have us separated out neatly so they can quantify potential taxes and leverages.


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## _Tron_ (Feb 9, 2020)

Good discussion going on here!


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## rudi5wudi (Jul 26, 2021)

Before this discussion, I didn't even think about such details in the work of Uber. Thank you for the information! 
Before that, I also had to read works related to legal issues and could not understand, but you explained everything. Because I was not told how to handle documents when I was young properly, I constantly had problems with this. The pieces of paper were lost, filled out incorrectly, and had to be redone. But now, there is an opportunity to keep everything in a digital version — Fillable Form 1099-MISC (2021): Printable Form 1099-MISC (2021) blank, sign forms online — PDFliner. Thanks to my service, my torment is over, heh.
Although in the situation with Uber, he is powerless.


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