Getting Ready for 1099 Season: Collect W-9s Now

· RKube Services

2025 Forms 1099-NEC are due February 2, 2026. Here's who needs one, how the new $2,000 threshold works, and why December is the time to collect W-9s.

Late January, a business owner opens their books to file 1099s and finds eight contractors they paid last year. They have W-9s for three of them. One contractor has moved, one isn't answering email, and one sends back a form with a different business name than the one on the invoices.

This happens every year. The fix is simple: collect W-9s in December, while people are still responsive and before the deadline pressure starts.

The Key Dates and Thresholds

  • Due date: Forms 1099-NEC for 2025 payments are due to both the contractor and the IRS by Monday, February 2, 2026. (January 31 falls on a Saturday this year.)
  • 2025 payments: the reporting threshold is still $600.
  • 2026 payments and later: the One Big Beautiful Bill Act raises the threshold to $2,000 for payments made after December 31, 2025.

That second point trips people up. You may have read that the threshold went up. It did, but not for the forms you're filing this winter. Anything you paid a contractor in 2025 still uses $600.

Source: IRS: One Big Beautiful Bill provisions

Who Gets a 1099-NEC

Generally, you file a 1099-NEC when you pay someone who isn't your employee $600 or more during the year for services in the course of your business. That usually includes:

  • Independent contractors and freelancers who are individuals
  • Single-member LLCs and partnerships
  • Attorneys, even if their firm is a corporation

You generally don't need one for payments to C or S corporations (other than attorneys), payments for merchandise or goods, or payments to employees, whose wages go on a W-2.

Rent paid to a landlord and certain other payments go on Form 1099-MISC instead, which has its own IRS deadline. The IRS instructions for Forms 1099-MISC and 1099-NEC cover the details.

The Card and PayPal Exception

If you paid a contractor by credit card, debit card, or through a payment app or processor like PayPal for business payments, you generally don't issue a 1099-NEC for those payments. The payment company handles reporting on Form 1099-K instead.

Checks, ACH transfers, wire transfers, and cash are on you. That's why it helps to look at how each contractor was paid, not just how much.

Example Scenario

A small design studio paid these contractors in 2025:

  • A freelance developer: $4,200 by ACH. Needs a 1099-NEC.
  • A copywriter: $1,800, all paid by business credit card. No 1099-NEC from the studio; the card processor reports it.
  • A photographer: $550 by check. No 1099-NEC; under $600.
  • A law firm organized as an S corporation: $3,000 by check for legal work. Needs a 1099-NEC, because attorneys are the exception to the corporation rule.

Now fast-forward a year. If the studio pays the photographer $1,800 by check during 2026, that's below the new $2,000 threshold, so no 1099-NEC for that year.

Why W-9s Matter

The W-9 gives you the contractor's legal name, business entity type, and taxpayer identification number. You need all three to file correctly, and the entity type tells you whether they're a corporation you can skip.

If a contractor won't provide a TIN, you may be required to start backup withholding at 24% on future payments. Nobody enjoys that conversation, which is one more reason to ask for the W-9 before you pay, not after. A blank Form W-9 is on the IRS site.

A December Checklist

  1. Run a report of all vendor payments for 2025 from your books.
  2. Flag every non-employee paid $600 or more by check, ACH, wire, or cash.
  3. Check which of those you have a current W-9 for.
  4. Email the rest now, with a blank W-9 attached and a clear deadline.
  5. Decide how you'll file. If you have 10 or more information returns in total, you're generally required to e-file. The IRS offers a free portal called IRIS.
  6. Going forward, get a W-9 at onboarding, before the first payment.

Some states have their own 1099 filing rules, so check with your state revenue department as well.

How RKube Helps

  • Pulling your 2025 contractor payments from your books and sorting out who needs a form
  • Requesting and tracking W-9s from your vendors
  • Preparing and e-filing 1099-NEC and 1099-MISC forms before the deadline
  • Setting up your bookkeeping so 2026 contractor payments are tracked against the new threshold

If your vendor records are a mess, our free 30-day bookkeeping trial is a good way to sort them out. See our campaign page or call (984) 234-7030.

Final Thoughts

1099 season isn't hard. It's just unforgiving when you start late. An hour spent collecting W-9s this month can save you a stressful last week of January.

This is general information; if you're unsure whether a specific payment is reportable, ask a tax professional.

RKube Services
Bookkeeping, tax preparation, payroll, and proactive tax planning.

https://rkubeservices.com

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