If you paid independent contractors, rent, or certain other types of payments during 2025, you may be required to file Form 1099-NEC (Nonemployee Compensation) or Form 1099-MISC (Miscellaneous Income). These forms are due to the IRS — and to the recipients — by January 31.
Failing to file required 1099s can lead to costly penalties, so it’s important to understand your responsibilities and take action early.
Which Forms Do I Need to File?
- Form 1099-NEC is generally used to report payments made to independent contractors.
- Form 1099-MISC is used for certain other payments, such as rent.
If you paid a business that is taxed as a corporation, a 1099 is generally not required. However, payments to individuals, sole proprietors, and many LLCs do require reporting.
What Information Is Required?
To file a 1099, you must have the recipient’s:
- Social Security Number (SSN) if the contractor is an individual, or
- Employer Identification Number (EIN) if the contractor is a business entity.
The best way to obtain this information is by requesting a Form W-9 from each contractor. It’s important to document that you requested the W-9 — even if the contractor does not return it — to help protect yourself from potential penalties.
Filing Options and Timing
If you use QuickBooks Online, the 1099 filing process is relatively straightforward and can be completed directly within the platform. For businesses that do not use QuickBooks, Tax1099 is another reliable option that has worked well for many filers.
Regardless of the method you use, we recommend completing your 1099 filings by January 27 to allow enough time for processing and mailing before the January 31 deadline.
Why This Matters on Your Tax Return
On Schedule C, Form 1065 (Partnership), and Form 1120-S (S Corporation) returns, there are required questions asking:
- Whether you paid independent contractors, and
- Whether you filed (or will file) the required 1099s.
Answering “yes” without actually filing the forms can raise red flags and increase the risk of penalties.
Penalties for Late or Missing 1099s
The IRS imposes penalties based on how late the forms are filed:
- $60 per form if filed within 30 days of the due date
- Up to $340 per form if filed after August 1 or not filed at all
- $680 per form for intentional disregard of filing requirements
These penalties add up quickly, especially for businesses with multiple contractors.
Need Help?
If you’re unsure whether you need to file 1099s, need assistance gathering the proper information, or want help ensuring everything is filed correctly and on time, we’re here to help.
Steve Martin CPA, PLLC works with business owners to keep compliance simple and stress-free — so you can focus on running your business.