Do You Need to File 1099s? A Quick Guide for Business Owners
If you’re a business owner, understanding Form 1099 is critical to staying compliant with IRS regulations—and avoiding costly penalties. But many business owners are unsure if, when, and how they need to file 1099s. Here’s a quick guide to help clarify your responsibilities.
What Is a 1099?
Form 1099-NEC is used to report payments made to non-employees, such as independent contractors, freelancers, or service providers. If you paid $600 or more to any non-incorporated individual or business during the year for services performed for your trade or business, you’re likely required to issue a 1099-NEC.
Who Gets One?
You must issue a 1099-NEC to:
- Independent contractors
- Freelancers
- Consultants
- Unincorporated businesses (sole proprietors and some LLCs)
This includes payments for services such as web design, marketing, accounting, repair work, and more.
Who Doesn’t Get One?
Generally, you do not need to send 1099s to corporations (including S-corps and C-corps), unless they’re attorneys or medical providers, who are exceptions to the rule.
When Are They Due?
You must send 1099-NEC forms to recipients by January 31, and file them with the IRS by the same date—either by mail or electronically.
Stay Compliant
Missing 1099 filings can lead to penalties of up to $630 per form. A professional accountant can help you identify who qualifies, collect W-9 forms in advance, and ensure you meet your deadlines.
Need help sorting out your 1099 obligations? Let’s talk.
