Tax deadlines are terrible, but this one cannot be ignored. Paying anyone $600 or more last year means sending them a 1099-NEC form. The deadline is February 2, 2026 since January 31 falls on a Saturday, and yes, the IRS cares about this one.
Miss the deadline and you pay $60 per form in penalties. File 10 forms late and suddenly there’s $600 in penalties before tax season starts. It’s worth spending an afternoon on this to avoid that.
Who gets a 1099 from your business?
Service-based business owners work with contractors constantly. Virtual assistants, designers, bookkeepers, social media managers, freelancers in every category. Anyone earning $600 or more in 2025 gets a 1099-NEC from you.
One exception trips everyone up. Payments through credit card or PayPal or Venmo don’t require a 1099 from you. The payment processor handles that with a Form 1099-K. You only send 1099s for direct bank transfers or checks.
Corporations don’t get 1099s, with two odd exceptions. Attorneys and healthcare providers get 1099s even when incorporated.
Getting the information needed
Legal name, address, SSN or EIN. The IRS wants all of it collected on a Form W-9 before work starts.
Missing W-9s? Download the form from the IRS website and email it to contractors with a deadline. Explain it’s required for 1099 purposes. Never hire someone without a completed W-9 so next year doesn’t become this year.
Three ways to file
Free option… The IRS IRIS portal costs nothing. Create an account and get approved for a Transmitter Control Code, which takes a few days. Once approved, enter the 1099 info directly and file electronically. Free, though it requires setup time.
Paid option… Software like Tax1099, TaxBandits, or eFileMyForms runs $2 to $10 per form. These services handle the work for you. Most include W-9 collection tools and state filing. Worth the money if there are many contractors or paying someone else to manage it sounds good.
Paper option… Don’t do this. The paper deadline is February 28, and it requires a transmittal form. Slow, error-prone, and not worth the savings.
What happens when it’s late
Late filing penalties are steep. $60 per form when filing within 30 days of the deadline. After 30 days it jumps to $130 per form. After August 1, it’s $340 per form. Intentional avoidance costs $680 per form.
Filing 20 forms just 10 days late means paying $1,200. Small businesses can accumulate $239,000 in annual penalties for filing within the 30-day window. It adds up quickly.
Good news for 2027
Starting in 2027, the 1099 threshold goes from $600 to $2,000. Only contractors paid $2,000 or more will require 1099s. But that’s next year. Right now, $600 is the threshold.
This weekend, pull 2025 payment records, collect any missing W-9s, and file before February 2. Annoying, yes. But future you won’t be paying penalties in March.
