Filing Your 1099s: What, Why, & How to Finish By Tax Time

Maybe you’ve never filed a 1099 before, or you have, but you’re still not 100% sure what you’re doing (or even why you’re doing it). With the end of the year coming quickly and tax season right around the corner, filing your 1099s isn’t exactly a task on your to-do list you want to skip.

So, to simplify your process and help you stress less this year, this is your complete guide to IRS Form 1099-NEC. I’m sharing everything you need to know to get started (and finish by tax time):

*Note: It’s important to consult with a tax professional or accountant about your specific situation to ensure you comply with ALL tax laws and regulations. 

What is the Form 1099-NEC?

A Form 1099-NEC is the IRS form used to report non-employee compensation — pay from independent contractor jobs, sometimes referred to as self-employment income or freelance work to individuals who are not employees.

For example, if you’re hiring a copywriter for a sales page (or website), a designer for your branding, or a content writer for your blog — pretty much any service-based business.

Yes, the IRS does require you to report those earnings.

Who Needs to File 1099 NEC?

Not every small business requires a 1099 NEC; it depends on the amount you’ve paid them this year, if they’re a US citizen, their business structure, and how you paid them. 

Start by looking at how much you’ve paid them (this is where having a clean and up-to-date book and maintaining good bookkeeping habits come in handy). If you’ve paid more than $600 total in the year, you may need to file a 1099 NEC. If you haven’t, then one isn’t required.

Now look at the contractors you have paid more than $600 to. Are they a US citizen? If not, then you don’t need to file a 1099 NEC. What is their business structure? Are they a C Corp or S Corp? If so, they also don’t need a 1099.

Finally, look at how you paid them. Did you pay with cash, check, or bank transfer? If so, then yes, you do need to file a 1099 NEC. If not, the contractor will file the 1099 for you.

What Information Do You Need to File?

To file a 1099 NEC, you will need the contractor’s name, address, TIN, and the amount paid (which can be found quickly with organized books).

The non-employee (contractor) should provide this information on a Form W-9 before you issue any payments. If you haven’t collected this information, do so ASAP and add requesting a W-9 to your outsourcing workflow moving forward.

When To File Your 1099-NEC

Contrary to popular belief, 1099s are not due on tax day — they’re due on January 31st of the following year. For example, for the payments made in 2024, you must file form 1099-NEC by 01/31/2025. 

As always, I recommend you add the date to your calendar and the due dates for your quarterly tax payments. It’s not impossible to file late, but you will be subject to penalties and fees, so it’s not recommended.

How to File Your 1099s Before You’re Out of Time

Technically, you’re never truly “out of time” to file, but if you want to avoid paying fines, it’s important to have them filed by the deadline. The easiest way to do so is to stay on top of it year-round.

When you hire someone for their services, ask for a W-9 to ensure you have the contractor’s information on file. Keep your books up to date and organized to see when contractors meet the payment threshold and require a form filed.

If you’re not sure where to start, consult with a bookkeeper and tax professional to make sure you’re on the right track — or to take it off your plate entirely. When you’re ready for support or interested in learning more about how I can help you this tax season (and beyond), get in touch here.