The IRS Form 1099 is required to report various types of non-employment income to the IRS, which includes freelancers, interest, or dividends. Moreover, it is essential that the Form 1099 be issued to the recipient and the IRS by the end of January or Early February after making the payment. In this guide, we have explained the due dates, penalties, and how to file the 1099 form. Thus, it will help you file the tax return on time, preventing you from paying heavy tax penalties, which will enhance your taxation experience.
The IRS Form 1099 is a group of tax forms that is used to document payments done by any individual or a business that typically isn’t your employer. Most of the small businesses have to send a 1099 form while making certain payments. Then, the copies of these forms are sent to the payee as well as to the IRS. However, the payer is responsible for filing out the 1099 form properly and then sending it to you.
Besides this, it is essential that the IRS provide the 1099 form to the payers by January 31. But there are certain instances when you need to file them by February 15.
Herein, we have discussed who can receive a Form 1099.
You must get a 1099 Form-NEC if your earnings are $600 or more in non-employee compensation from a person or business who isn’t your employer.
Also, you will get a Form 1099-MISC when you have earned $600 or more in rent or royalty payments.
Whereas, you will obtain a Form 1099-G when you received a state or local tax refund throughout the previous year.
Similarly, if you paid a freelancer, independent contractor, or other non-employee $600 or more throughout the year before 2026 related to trade or business, you must send Form 1099-NEC.
At the start of the 2026 taxation year, the threshold for Form 1099-K, 1099-MISC, and 1099-NEC may increase to $2000. thereon, it gets increased each year thereafter, depending on inflation.
The due dates for the different types of 1099 forms may vary. The following are the due dates for filing the 1099s Form.
The 1099 forms are due by the recipient by January 31.
In case you are mailing a paper form to the IRS, then you have to send the 1099 form by February 28.
Whereas, the Form 1099-NEC is due to recipients and to the IRS by the end of January 31, excluding whether they are electronically filed or paper filed.
The due date of the 2025 tax year for filing the 1099 Form may vary according to the specific Form as well as your filing method. Below, we have discussed the due dates for tax filers in early 2026.
For the reporting of non-employee compensation, the due date is February 2, 2026, for the recipient and the IRS.
The due date for the taxpayers who need to report the miscellaneous income may vary depending on the payment and how you will file.
To recipients: February 2, 2026.
Paper filing to the IRS: March 2, 2026.
Electronic filing to the IRS: March 31, 2026.
For filing any other 1099 forms, like 1099_DIV for dividends or 1099-INT for interest, the following are the due dates.
To recipients: January 31, 2025.
Paper filing to the IRS: February 28, 2025.
Electronic filing to the IRS: March 31, 2025.
If you are a small business owner, then there are several requirements that you must fulfil to file the 1099 Form accurately.
Ensure that you require a valid taxpayer identification number (TIN) for all payees.
Also, it is necessary to have an accurate record of all payments made to every payee, consisting of the date, amount, and payment type.
Below, we have summarized the detailed comparison of the 1099 NEC and 1099 MISC forms.
|
Feature |
Form 1099-NEC |
Form 1099-MISC |
|
Definition |
The IRS tax Form 1099-NEC is used for reporting non-employee compensation. |
The IRS Tax Form 1099-MISC is used for reporting miscellaneous income. |
|
Filing Deadline |
The deadline for filing this tax form with the IRS and a copy to the recipient is 31st January of the year following the tax year. |
The tax filing deadline of this form depends upon the filing method and payment type. Recipient: 31st January IRS (paper): 28th February IRS (electronic): 31st March |
|
Payer Responsibility |
The payer (whether it is n business or individual) have to file the form with the IRS. Also, the payer needs to provide its copy to the non-employee payee. |
The payer is responsible for filing the taxation form with the IRS and you need to provide a copy to the recipient. |
|
Reporting Threshold |
The person who is earning $600 or more in non-employee compensation to any single payee within a calendar year. |
The person who is earning $600 or above for miscellaneous payments, but $10 for royalties. |
|
Examples of payments |
The professional service fees charged, payments made to attorneys for services. Commissions done to non-employee salespeople. |
Rent payments which is done for office space. Royalties of $10, prizes and awards. Medical and healthcare payments. Gross proceeds paid to an attorney. |
Filing of the Form 1099 is essential to report the payments to independent contractors. Herein, we have discussed the detailed procedure to file the form correctly and in a timely manner.
Firstly, you must collect all the necessary details from your independent contractor, which consist of:
Total payments made throughout the year
Legal name, address, and the taxpayer identification number (TIN) are mentioned on Form W-9.
Herein, you have to complete all the necessary details within the Form 1099-NEC along with the contractor’s payment details.
You have to file Copy A of the 1099-NEC to the IRS by January 31st. Also, you can file the form electronically or via mail.
Herein, you have to provide Copy B to the independent contractor by the 31st of January. You can also send it via mail or electronically.
If you are filing a paper copy, then submit the Form 1096 along with the 1099 forms by January 31st.
Now, you must check whether your state needs additional filing for 1099 forms.
For convenient submission, you must prefer IRS e-filing services or compatible accounting software.
You can also file a 1099 form online by following the steps below closely.
You must access the IRS FIRE (Filing Information Returns Electronically) system for e-filing of the copy A of 1099-NEC. For filing, you must require a compatible software along with a Transmitter Control Code (TCC), which is a unique code issued by the IRS. This code is required for e-filing. Once you obtain this code, sign up for an account on the FIRE system for submitting the form electronically. Herein, you won’t require any paper copies.
After this, you can send an email, Copy B, to your contractor, but first, you require the consent. Make sure that the consent must include the following details:
Confirmation that if they don’t consent to electronic delivery, they will get a paper copy.
Instructions for requesting a paper copy, even if you get consent for electronic delivery.
Details regarding how to update their information with you.
Also, you require a description of the hardware and software required for printing and viewing the form.
A date from when the form is no longer available electronically.
The scope and duration of the consent.
Using the Payroll and HR management tools, you can simplify the filing process by automating consent collection and submission processes. Thus, it minimizes the manual errors and saves your precious time for filing 1099 on time.
It is essential for taxpayers to have the essential documents for filing the tax return smoothly. But sometimes users may find that the 1099 form they already filed is incorrect because of the missing documents. So, it is essential that every taxpayer receive income documents at the end of January. It may involve:
Form W-2, Wage and Tax Statement
Form 1099-MISC, Miscellaneous Income
Form 1099-INT, Interest Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-G, Certain Government Payments, like unemployment compensation or state tax refund
In case the taxpayer hasn’t gotten the Form 1099, they must contact the employer, payer, or issuing agency. Then, request to send a copy of the missing or corrected document.
It is mandatory that every taxpayer file the 1099 form by the deadline of April 18, despite having missing or incorrect documents. In case they fail to get the missing or incorrect form from their employer or payer by the end of February, they can connect with the IRS. All you require is to provide them with the name, address, phone number, Social Security number, and dates of employment. Along with this, you also need to provide the employer’s or payer’s name, address, and phone number. After this, the IRS will instantly get in touch with the employer or payer and request the missing form.
Once the taxpayer connects with the IRS regarding the missing documents, the IRS will provide the taxpayer with Form 1099-R. In case the missing form is still not received by the time of filing, they must complete Form 1099-R to estimate the earnings and wages. Then, you can attach the necessary form along with the tax return for filing.
If the taxpayers get an incorrect Form 1099-G for unemployment benefits, they must contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Moreover, the Taxpayers who fail to get the form timely must report only the income they received.
If you obtain a Form 1099-MISC or Form 1099-NEC, which is used for reporting miscellaneous income, it must be filed with the IRS. If you won’t include this or any other taxable income on your tax return, then you are liable for the penalty. Any failure to file the Form 1099 with the IRS may cause a penalty that will be equal to 20% of your underpayment.
If you don’t file a 1099 tax form, several penalties are imposed by the IRS. There are many instances when the taxpayer understates their tax by the greater of 10% of the correct amount or $5000. In these circumstances, you need to pay the penalty of 20% of the understated tax. However, the IRS can also impose interest on any tax which isn’t been paid and also on any assessed penalties.
The tax filers can issue a 1099 to an LLC (limited liability company) if the amount crosses $600 in one year, unless the LLC is taxed as a corporation. Moreover, this income is one you received from services, rent payments, and other sources. In case you pay an LLC above $600 for services, products, or rent within a given tax year, you must send a 1099 form.
The following are the stepwise instructions to issue a 1099 form to an LLC.
The requirements to file a IRS 1099 form will depend on the type of LLC you’re preparing. But for filing, all you require is a business name and a taxpayer identification number (TIN). Besides this, for partnerships, you must list down the business name and employer identification number (EIN).
The following is the information that you must have for filing the 1099 form.
Any rent payments that are included in Box 1.
Payments made for medical or healthcare payments will be mentioned in Box 6.
Payments for prizes, awards, and other income will be mentioned in Box 3.
To get the 1099 Form, you must visit the irs.gov/orderforms. Once you order the forms, you will deliver them electronically or via mail. Thereon, you can locate the list of all available forms or look for the type of 1099 form. Each form contains the instructions for the payer and recipient. In case you still have any doubts, you can connect with a qualified accountant.
Once you have finished filing the 1099 form, make sure that you have delivered it to the LLC. Also, you can determine where you can send by referring to the W-9 form that the LLC completed at the start of the arrangement. It is necessary that every 1099 form be sent to the LLC by 31st January.
The taxpayers need to file the Form 1099-NEC only when the business has paid you $600 or above within the tax year. But even if you have made a payment under $600, you need to report all your income on your tax return. Moreover, it is also necessary to file a return to pay self-employment taxes if your net self-employment income is at least $400.
Below, we have discussed the detailed stepwise instructions to file a Form 1099-MISC for rent.
The recipient (payee) is the landlord who collects the rental payment. For filing, you must require their complete name, mailing address, and taxpayer Identification Number (TIN) received via a signed Form W-9. Business Entity Type (individual, partnership, corporation, LLC, etc).
Herein, the payer refers to the businesses or entities that make the rental payments. It comprises the legal name of the business or entity, business address, Employer Identification Number (EIN), or Taxpayer Identification Number (TIN).
Herein, you must enter the total amount of rent paid throughout the taxation year (if ≥ $600). This includes the payment for office or commercial space, machine rentals, or pasture land rentals. Also, it includes the payment for both fees and in-kind values (goods or services).
In case the backup withholding applies due to a missing or inappropriate TIN or other IRS backup withholding rules, then fill out Box 4.
An account number is necessary when multiple accounts exist for a single recipient. The IRS also needs to mark the box next to the Foreign Account Tax Compliance Act (FACTA) if it applies.
Filing the tax forms might be a bit challenging and time-consuming for the users, but not anymore. With this post’s help, we hope that now you can easily file the 1099 form without any mistakes. Furthermore, if you still need help filing a 1099 form or need any expert’s supervision, feel free to connect with our experienced BooksMerge professionals. They will provide you with support throughout the entire tax filing process to make your taxation experience better.
