What form is necessary for reporting an independent contractor's income?

To report an independent contractor's income, the appropriate form is the 1099-NEC. This form is specifically designed for reporting non-employee compensation, which includes payments made to independent contractors for services rendered. When a business pays an independent contractor $600 or more in a year, they are required to provide this form, which details the total amount paid, enabling the contractor to accurately report this income on their tax return.

Using the 1099-NEC ensures compliance with IRS regulations regarding the reporting of non-employee compensation. It serves as a formal record of income earned by the contractor and is crucial for both the payer and the recipient during tax preparation. The form must be provided to the independent contractor by January 31 of the following year, allowing them ample time to report the income on their annual tax returns.