Which 1099 form to use for medical contractors - 1099 MISC Box 6 or 1099 NEC?

But what if the staffing agency is providing the nurses? Wouldn't the 1099 go to the agency instead of to the individual nurses? And for the doctors on call, does it matter if they're corporations or individual practitioners?

You're asking great questions. For nurses provided through a staffing agency, you're right - the 1099 would go to the agency itself, not to the individual nurses. The agency is responsible for their own tax reporting to the nurses they employ or contract. For the doctors on call, yes, it does matter if they're corporations or individual practitioners. If a doctor has set up a corporation (like an LLC, S-Corp, or C-Corp) and you're paying that entity rather than the individual directly, you'd issue the 1099 to their business entity. However, there's an exception - you generally don't need to issue 1099s to C-Corporations, though there are some exceptions including medical corporations. If they're operating as individual practitioners (sole proprietors), you'd issue the 1099-NEC to them personally using their SSN.

Does this taxr.ai thing actually work with complex situations? We have doctors who sometimes work as employees and sometimes as contractors in different facilities. Can it handle that kind of arrangement?

I'm skeptical about these tax AI services. How do they handle state-specific requirements? In California we have AB5 and other states have their own contractor classification rules that are different from federal. Does it cover those differences?

It absolutely works with complex situations. The service analyzes contractor agreements and work arrangements, even in cases where someone might have dual roles. They can evaluate whether your classification methods meet legal requirements in those complex scenarios. Regarding state-specific requirements, that's actually one of their strengths. The system is updated with state-level contractor classification rules including AB5 in California and similar laws in other states. They provide guidance on both federal and state compliance which was super helpful for our multi-state operations. When they return their analysis, they specifically call out any state-specific issues you need to address.

How does this actually work? Do they somehow jump ahead in the IRS queue or what? Seems like there would be thousands of people trying to use this, especially during tax season.

No way this is legit. I've been doing accounting for 15 years and there's absolutely no way to get around the IRS phone system. They probably just put you on hold themselves and pocket your money.

It doesn't jump ahead in the queue at all. The way it works is their system waits on hold for you so you don't have to be glued to your phone. When a live IRS agent picks up, their system immediately calls you and bridges the call. You pick up and you're instantly connected to the IRS agent who just came on the line. I had the exact same thought about it being some kind of scam. But after wasting half a day on hold myself, I figured it was worth trying. It actually works exactly as advertised - no magic line-cutting, just technology that waits on hold so you don't have to. And when I finally spoke to the IRS agent, they answered my 1099 questions completely and I got the guidance directly from the source.

Do you know if there's a penalty for filing 1099s late? I'm in a similar situation and I'm worried we might miss the deadline for some of our medical contractors while we sort out the correct form.

Yes, there are penalties for late filing, and they increase the longer you wait. For 2025 filing season, if you file within 30 days of the deadline, the penalty is $60 per form. If you file after 30 days but by August 1, it increases to $120 per form. After August 1 or if you don't file at all, it's $310 per form. However, if you need more time, you can request an extension using Form 8809. This gives you an automatic 30-day extension for filing 1099s. The good news is there's no penalty for requesting this extension, so if you're cutting it close, definitely file for the extension to give yourself some breathing room.

I use QuickBooks for our dental practice and it handles both forms well. When you set up a vendor, there's an option to mark them as eligible for 1099. Then when you're ready to file, you go to Vendors menu > Print/E-file 1099s and the system will guide you through selecting the right form and proper boxes. It automatically suggests the right form based on payment type, but you can override if needed.

Thanks for the info! I just went in and checked our QuickBooks setup. You're right about the vendor settings - I hadn't properly flagged all our medical contractors for 1099s. I also found the 1099 wizard under the Vendors menu that lets you verify everything before filing. One other thing I discovered is that QuickBooks lets you e-file the 1099s directly from the software which might save me some time given how close we are to the deadline. Definitely less stressful than trying to print and mail everything last minute.