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1099's & Contractors
If you paid contractors or service providers during the year, you may be required to issue a 1099. The rules vary based on how and what you paid, which makes this one of the most commonly misunderstood tax requirements for business owners.
Who is generally required to issue 1099's?
If you made a payment during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS. Receipt of certain payments may also require you to file an information return to the IRS. The most common situation is paying a contractor (non-employee) for services.
Self-Employed & LLCs
Sole proprietors, single-member LLCs, and partnerships who pay non-employees $600+ for services are generally required to file 1099s.
Small Business Owners
Retail shops, service companies, contractors, and local businesses that hire freelancers or subcontractors often must issue 1099-NEC forms
Real Estate Professionals
Property managers, landlords, and real estate brokers frequently issue 1099s for contractor work, repairs, and rent payments.
Professional Practices
Law firms, medical offices, marketing agencies, and consulting firms regularly issue 1099s to independent contractors and vendors.
Types of 1099's
1099 - NEC
Form 1099-NEC is used to report payments of $600 or more made to non-employees for services performed in the course of your business. This most commonly applies to independent contractors, freelancers, consultants, and other self-employed individuals you paid during the year. If you hired someone who is not on your payroll and paid them for work, you likely need to issue a 1099-NEC.
Types of 1099's
1099 - MISC
Form 1099-MISC is used to report certain types of miscellaneous payments made in the course of your business that are not for standard contractor services. This can include rent payments, royalties, prizes and awards, medical and healthcare payments, and certain attorney payments. If the payment does not fall under non-employee compensation but still meets IRS reporting thresholds, it is typically reported on Form 1099-MISC.
IRS Deadlines for 1099's
IRS 1099 deadlines arrive quickly each year, and missing them can result in penalties and unnecessary stress. Most businesses must issue 1099-NEC forms to contractors by January 31, with additional IRS filing deadlines following shortly after. Staying ahead of these dates ensures compliance and gives your recipients time to properly prepare their returns. We make the process simple, accurate, and on time.
1 / Submit Your Contractor Information
Provide us with your contractor details, payment totals, and completed W-9 forms. If anything is missing, we’ll help you gather what’s needed to ensure accurate filing.
3 / Confirmation & Ongoing Support
You receive confirmation of filing and copies for your records. If questions arise or corrections are needed, we handle them promptly to keep you compliant.
2 / We Prepare & File Your Forms
Our team prepares the required 1099-NEC or 1099-MISC forms, verifies totals, and files them with the IRS before the deadline. We also ensure recipient copies are properly issued.
Disclaimer
This page is for general educational information only and is not legal or tax
advice. Requirements vary based on your specific facts. Contact a qualified tax
professional for guidance related to your situation.