“If you’re having 1099 problems I feel bad for you son, we had 1099 problems but gettin’ em filed ain’t one”
Welcome to 2025! The first task up for most business owners is filing 1099’s, so whether this is your first time filing them or you’re a seasoned pro at this, here’s what you need to know!
1099s need to be issued for anyone you paid more than $600 for services in 2024!
If you'd like our help we will need your info ASAP, but no later than 1/16!
Our fee for preparation of 1099's is $300 for up to 5, and $50 per 5 above that.
Please send your 1099 info in a complete and single batch for the fastest processing. Sending multiple batches will receive an additional charge at our discretion.
If you missed our deadline to get us information or would prefer to prepare them yourself, see additional info below:
Option 1: you’d like our assistance with preparing your 1099’s
What we need from you: For anyone you paid more than $600 for services in 2024, we'll need a completed W-9, along with the amount you paid them! If we do your bookkeeping, we'll reach out with a list, if we don't do your bookkeeping, please reach out to us with your own list. You can skip any corporations (name ends in Inc. or Corp) but not LLC's (some of them still need 1099's). If you paid vendors via venmo or paypal, see the FAQ below. Not sure? Ask us!
Do we need to send my info all in one batch? Yes, please hold them until you have all of your W-9's and amounts together. Sending us multiple batches or "I just found another one" takes us additional time and makes it harder for us to keep work flowing efficiently. Information that comes in that fashion may receive an "organization charge" at our discretion.
When do we need it?: 1099's are due out to your vendors by Jan 31st, but we will need some time to prepare them. We ask that you get us any info to prep 1099's as soon as you can but no later than Jan 16 to ensure we have time to prepare them.
How much to prepare them? For up to 5 vendor 1099's we charge $300, 6-10 $350, and an extra $50 for each increment of 5 above that.
Do you mail them out? Not by default. We typically provide the completed copies to you so that you can distribute to your vendors in whatever way makes the most sense for you. If you provide email addresses for your vendors in your initial batch of info, we can email them out at your request.
What if I don't have the info together by Jan 16th? The past few years we've had a big crunch of last-minute people, so in an effort to be fairer to our staff, we will be charging a $100 rush fee if we get your complete 1099 info after Jan 16, and not accepting any new 1099 info after 1/25.
Option 2: You would rather prepare them yourself or missed our deadline
Wait, I can do 1099’s myself? Of course! We use a software called Track1099.com to process and efile these 1099’s. If you’ve missed the deadline for us to prepare them, or just want to save a few bucks this year, you can go ahead and process them yourself. Please just provide us a copy for our records once you do.
Can I still ask you questions if I prepare them myself? If you choose this option, please note that we are understandably prioritizing our clients that paid for us to prepare their 1099’s and won’t be answering specific questions on how to process them using this or any other service. This page covers the most common questions, and the IRS website has a much more comprehensive guide. If you still have questions and it’s before 1/25, feel free to reach out to engage us to prepare them for you!
Common FAQ’s about issuing 1099’s
Who should receive a 1099? The IRS requires that your business issue a 1099 to any vendor that you made payments of $600 or more for services, rent and a few other less common payment types during the tax year. Even if they meet that threshold, the IRS grants an an exception to the requirement to issue them in the following situations:
Corporations do not require a 1099 (but LLC’s may , so still get those W-9’s to be sure)
Vendors paid via credit card or other merchant processor do not require a 1099 (see additional notes on venmo and paypal below)
Vendors that are not US persons and did their work entirely outside the US, with no US connection do not require a 1099.
I bought materials or products from someone, do I need to issue them a 1099? No, 1099’s are not required to be issued for purchases of materials or property, they are generally for things like services and other intangible income streams (rents, dividends, winnings etc)
I paid someone via Venmo, Paypal, Zelle, or other payment platform, do I need to issue them a 1099? If you paid a vendor via a service that takes a % fee for the transaction from the recipient, then they are acting as a merchant processor and you do not need to also issue a 1099. This includes paypal and venmo “Business” payments, but not friends and family payments. We do not recommend sending business related payments via “friends and family”, but if you did, you may still need to issue a 1099 for those payments.
I pay all my contractors via Gusto or other payroll service, do I need to separately prepare 1099’s? Generally no. When you pay your payments via your payroll service, they will generally take care of the 1099 reporting. You should definitely verify this with them to be sure, but in most cases they do.
I reimbursed a vendor for expenses in addition to their payment, should that be included? Reimbursements are not required to be reported in the 1099 amounts, so if you are reasonable able to separate out reimbursements, you can, however if the reimbursements are not easily separated, then the IRS rules require the entire payment to be included in the 1099. In that situation, the vendor would instead just deduct their costs from that when they file their taxes.
The vendor isn’t responding to my requests for a W-9, what should I do? If you do not have a W-9 on file for a vendor, the IRS requires you to withhold 24% of their payments and remit it for taxes. You should NEVER be issuing payment without first getting a W-9 from a vendor.
What happens if I don’t issue 1099’s? If you fail to issue 1099’s, the IRS can charge you a penalty of up to $280 per form that was not filed. If you also did not collect the backup withholding for not receiving a W-9 from the vendor, the IRS can also require you to pay the neglected backup withholding of 24% of the payment, plus penalty and interest on that amount. Historically it hasn’t been followed up on that often, but with increased IRS budgets for enforcement, we’re expecting to see an uptick in all kinds of compliance checks.