The reporting amount threshold has increased. Yes, you read that right! The old $600 filing requirement for 1099-MISC & 1099-NECs has been increased to $2,000, with some minor exceptions.
To jog your memory, if you need it, you are required to file 1099s to those who you pay for rent, contract labor (not through your payroll), interest, etc. The 1099-MISC is most commonly used to report rent, while the 1099-NEC is mostly used to report non-employee compensation to most everyone.
Here is the steps to figuring out 1099’s:
- Who needs a 1099? You generally need to issue a 1099-NEC to any non-employee contractor or vendor you paid $2,000 or more for services during the year. This includes:
- freelancers, consultants, attorneys, and even independent contractors.
- Do you pay rent? You must issue a 1099-MISC to any non-corporation you pay $2,000 or more to in rent. Do you know if they are a corporation? Chances are no. You should have a W-9 form already in your files. If you don’t, do not wait to send one in January when we bug you for it. Request them now!
- Don’t include payments to corporations, unless they’re for legal services or medical payments — those exceptions can sneak up on you. All attorneys are required to be issued a 1099 regardless of their classification, and that threshold is still $600 as of now.
- Gather your info early. Make sure you have W-9 forms on file for everyone regardless if you think they qualify or not. You should always get a W-9 back before you pay them. If you’re missing any, now’s the time to track them down — before the holidays hit and inboxes vanish into the void. And then we’re bugging you until you send it.
- Deadlines sneak up fast. Both forms 1099-MISC & 1099-NEC is due to both the IRS and recipients by February 2, 2027. No extensions, no excuses. Start preparing now so you’re not sending frantic emails, texts and calls at midnight.
- Double-check your records. Names, addresses, and taxpayer IDs must match IRS records exactly. A quick review now can save you and us a headache (and possible penalties) later.
Let’s make sure your forms are clean, compliant, and sent on time — so you can focus on running your business, not chasing paperwork and answering countless calls from us! We will handle the rest! Your future self will thank you come January, and so will your favorite tax preparers here at Senter, CPA!
