Avoid the Year-End 1099 Scramble: A Simple Guide for Small Business Owners
Tax season doesn’t have to be a headache—especially when it comes to preparing and issuing your 1099 forms. As a small business owner, you know that getting organized ahead of time can save you from last-minute stress. One of the key tasks on your year-end to-do list is sending out 1099 forms to your vendors, and here’s a simple way to make it less painful.
Mark Your Calendar: 1099s are Due January 31st
Each year, the IRS requires businesses to send 1099 forms to vendors who you’ve paid for services (not goods) totaling $600 or more. The due date for issuing these forms to your vendors is January 31st—so it’s easy to find yourself scrambling if you haven’t stayed on top of it.
Don’t Wait Until January to Request W9s
Here’s a little secret: Don’t wait until the end of the year to request a W9 from your vendors. Instead, get them as soon as you receive an invoice—and definitely before you make any payments. If you don’t have a W9 on file, you could end up in a sticky situation come January, scrambling to get those forms when everyone else is too.
We recommend doing a quick vendor review in August or September to ensure you have W9s on file for anyone you’ve paid throughout the year. By getting ahead of it, you’ll be able to start the new year with confidence that your 1099 forms are ready to go.
Know the 1099 Thresholds for 2025
To help you get started, here are the key 1099 thresholds for 2025:
1099-MISC: You’ll need to issue a 1099-MISC if you’ve paid $600 or more for things like rents, prizes, or other income. For example, rent payments to a landlord or property owner must be reported on a 1099-MISC if you’ve paid $600 or more over the year.
1099-NEC: If you’ve paid $600 or more to an independent contractor or freelancer for services, you’ll need to send a 1099-NEC.
Who Needs a 1099?
Not all vendors need a 1099, so make sure you know who qualifies. For example:
Sole Proprietors, LLCs, and Partnerships: These types of businesses require a 1099 form if they meet the payment threshold.
C Corporations: You don’t need to send a 1099 to C Corporations, which include most large businesses. However, payments for legal services or medical services still require a 1099, even if the vendor is a corporation.
Feeling Overwhelmed? Pathfinder is Here to Help!
We get it—this can all feel like a big task, especially if you’re juggling multiple responsibilities as a small business owner. But don’t worry, Pathfinder Accounting Services is here to help you with all of your 1099 preparation needs. Let us take care of the details so you can focus on what matters most—running your business.
If you need assistance with 1099 forms, W9 collection, or just want to get ahead of the curve this year, give us a call. We’ll make sure everything is in order, and you’ll have one less thing to worry about.
Remember: Stay organized, stay ahead of deadlines, and don’t let tax season catch you by surprise!