As the year wraps up, one of the biggest questions small business owners have is:
“Do I need to send a 1099 to my contractor?”

If you’ve paid anyone for business services this year, this is definitely something to look into, and getting it sorted before January saves a lot of stress later.

What Is a 1099-NEC Form?

A 1099-NEC is a form used to report payments made to non-employees (independent contractors, freelancers, or service providers). The IRS requires that certain types of payments made for business purposes be reported each year.

In short, if someone worked for your business but isn’t on payroll, a 1099-NEC may be needed to report what you paid them.

Who Usually Needs a 1099?

Generally, you’ll need to send a 1099-NEC if you:

• Paid a contractor $600 or more during the year for business services.
  
• Paid them as an individual, sole proprietor, or single-member LLC.
  
• Paid them by cash, check, Venmo, PayPal, or direct deposit (not through employee payroll).
  

Some common examples include:

• Virtual assistants
  
• Freelance designers or marketers
  
• Bookkeepers
  
• Photographers
  
• Repair or maintenance professionals
  

Your bookkeeper can help you pull a report of who you paid and how much you paid them. From there, your CPA or tax preparer can confirm who needs a 1099 and handle the filing.

Who Typically Doesn’t Need a 1099

You usually don’t need to issue a 1099 to:

• Contractors paid less than $600 total during the year
  
• Businesses that are incorporated (S-Corps or C-Corps)

This is where organized bookkeeping makes things easy, because if your books are up to date, you can quickly see who meets that $600 threshold and how they were paid.

When Are 1099s Due?

Contractors must receive their 1099-NEC by January 31st each year.
That means your bookkeeping needs to be caught up before then, so your bookkeeper has time to file them on schedule.

Keep It Simple

If you’re unsure who qualifies for a 1099, you’re not alone; even seasoned business owners get confused by this part of tax prep. The best thing you can do is keep detailed records all year long so your accountant can file accurately (and quickly).

At Ever Leslie Bookkeeping, we keep your contractor payments organized, take care of sending out the 1099s, and help you head into tax season feeling confident and ready.

Need help getting your books 1099-ready? Schedule a free call with me, and let’s make sure everything is organized before January hits.

Disclaimer:

Ever Leslie Bookkeeping provides bookkeeping and financial organization services. We are not CPAs and do not provide tax advice or file taxes. The information shared in this post is for educational purposes only and should not be taken as tax, legal, or financial advice. Please consult with a licensed CPA or tax professional for guidance specific to your situation.