Preparing 1099 and Contractor Forms Before January

If you paid freelancers, consultants or other independent contractors this year, January brings a deadline that sneaks up on a lot of small businesses. The fix is simple: do most of the 1099 work in the fall, while your contractors still answer emails quickly and your records are fresh. Here is a practical plan to get every form ready before the new year starts.

Calendar page with tax day marked on it, a reminder of an upcoming filing deadline — The 1099 deadline lands on 31 January every year, so the prep work belongs in October and November.

Key takeaways

Forms 1099-NEC are due to contractors and the IRS by 31 January, the same day as W-2s.
The reporting threshold for 1099-NEC and 1099-MISC rose from $600 to $2,000 for payments made from 2026, and it will be indexed for inflation. Check the IRS for the current figure.
Collect a W-9 before you pay a contractor. Chasing tax ID numbers in January is the main reason small businesses miss the deadline.
Not every payment goes on a 1099. How you paid and who you paid both matter, so sort your list carefully.

Contractor forms are one of those admin tasks that feel tiny until they are urgent. You might have paid a web developer, a bookkeeper, a photographer and a part-time marketing freelancer during the year. Each of them may need a form from you, and each form needs a correct name, address and tax ID number. If one contractor has moved, changed their business name or stopped replying to emails, that single form can hold up the whole batch.

This guide is written for US businesses that pay US contractors, with a short section for UK and European readers at the end. It is general information, not tax or legal advice. Rules change, so check the current IRS instructions for each form and ask a qualified accountant about your specific situation.

$2,000 The 1099-NEC and 1099-MISC reporting threshold for payments made from 2026, up from $600 and indexed for inflation in later years IRS guidance on information return thresholds

What a 1099-NEC is and who gets one

Form 1099-NEC reports nonemployee compensation: money you paid, in the course of your business, to someone who is not your employee for services they provided. Typical examples are freelancers, consultants, independent designers, writers and tradespeople who work for your business.

The related Form 1099-MISC covers certain other payments, such as rent paid to a landlord in some situations. The thresholds and rules for each type of payment are set out in the IRS instructions, so if you pay rent, royalties or prizes, check those instructions directly.

Payments that usually need a form

Fees paid to an individual freelancer or sole proprietor for services.
Payments to many partnerships and LLCs for services, depending on how the LLC is taxed.
Legal fees paid to attorneys, which have special rules of their own.

Payments that often do not

Payments for goods: buying products or supplies is generally not reported on a 1099-NEC.
Many payments to corporations: these are often exempt, though there are exceptions, such as certain legal fees.
Payments by card or some payment apps: when you pay a contractor by credit card or through certain third-party payment networks, the payment company may handle the reporting instead. Check the IRS instructions for how this applies to the way you paid.
Payments to employees: wages belong on a W-2, not a 1099.

Common mistake

Using a 1099 to cover someone who is really an employee. Whether a worker is a contractor or an employee depends on how the relationship works in practice, not on what you call it. If a "contractor" works fixed hours under your direction with your equipment, talk to an accountant or employment lawyer before year-end.

Step 1: Build your contractor list

Start by finding everyone you paid for services this year. The easiest place to look is your accounting software or bank feed, filtered for payments that are not payroll, rent, utilities or inventory purchases.

Export all vendor payments. Pull a list of every non-payroll payment from 1 January to today.
Mark the service providers. Highlight payments for services rather than goods.
Note how you paid. Record whether each payment was by bank transfer, check, card or payment app, because that affects reporting.
Note the business type. Was the payee an individual, an LLC, a partnership or a corporation? The W-9 will confirm this.
Total by payee. Add up the year's payments for each contractor so far, then estimate what you will pay them before 31 December.

Doing this in October means you can see which contractors are close to the threshold and which are clearly over it, and you still have time to collect missing details.

Pro tip

Create a vendor tag or category in your accounting software called "1099 contractor" and apply it as soon as you pay someone new. Next year, your list will build itself.

Step 2: Collect and check W-9s

Form W-9 is how a US contractor gives you their legal name, business type, address and taxpayer identification number (TIN), which is either a Social Security number or an Employer Identification Number. The best time to collect it is before the first payment. The second-best time is today.

How to collect W-9s without a fight

Make a completed W-9 part of your contractor onboarding, alongside the contract and payment details.
Use a secure upload or portal rather than plain email, because the form contains a tax ID number.
Send one friendly reminder, then a firmer one, with a clear date.
Explain why you need it: "We are required to report payments to the IRS, and this form makes sure your details are right."

Check the details before January

Read each W-9 for obvious problems: a missing signature, a business name that does not match the invoices, a blank TIN or an outdated address. The IRS offers a TIN matching service for businesses that file information returns, which lets you check name and TIN combinations before filing. If a contractor refuses to provide a TIN, there are backup withholding rules that may apply to future payments. Ask your accountant how to handle that situation.

Papers and documents spread across a desk, being sorted into an organized pile — Sorting contractor paperwork in the fall turns January filing into a quick review.

Step 3: Track payments through year-end

Your list is a snapshot, not the final answer. Payments in November and December can push a contractor over the threshold, and a late invoice paid on 2 January belongs to next year. For 1099 purposes, what generally counts is when you actually paid, not when the work was done or the invoice was dated.

A contractor tracker template

Set up a simple sheet like this and update it each month. All names and amounts below are made-up examples.

Contractor	Entity type (from W-9)	W-9 received	Payment method	Paid year to date	Needs 1099-NEC?
Example Design Studio LLC	Single-member LLC	Yes, checked	Bank transfer	$6,400 (example)	Likely yes
J. Rivera (copywriter)	Individual	Chasing	Check	$1,750 (example)	Watch, near threshold
Example IT Services Inc.	C corporation	Yes, checked	Card	$9,200 (example)	Likely no, confirm

The last column is a judgment you should confirm against the current IRS instructions or with your accountant, especially for corporations, attorneys and card payments.

Example

Imagine Dana runs a small marketing agency. In October she exports vendor payments and finds eleven contractors. Three were paid by card, two are corporations and one is a supplier of printed goods, so she flags those for her accountant to confirm. Of the remaining five, two are missing W-9s. She sends secure requests that week and has both back by mid-November. In January, she reviews final totals, files five forms in one session and sends copies to her contractors the same day. (Dana and her business are made up for illustration.)

Step 4: Choose how you will file

You have three broad options for preparing and filing 1099s. Pick one now, so you are not comparing tools in the last week of January.

Your accounting or payroll software. Gusto and QuickBooks can prepare and file contractor forms from your payment data in many plans.
A dedicated 1099 service. Tools such as Tax1099 and Track1099 focus on information returns and can handle W-9 collection, TIN checks and delivery to contractors.
Your accountant. Many bookkeepers and accountants file 1099s for clients as part of a year-end package.

Check current features, pricing and privacy policies, and confirm whether a service files with the IRS, sends recipient copies, handles any state filing and supports electronic delivery. The IRS has also expanded electronic filing requirements in recent years, so check whether e-filing is required for your number of forms.

Do not forget state filing

Some states require their own copy of 1099 forms, either directly or through a federal and state combined program. Rules differ by state, so check your state tax agency or ask your filing service whether state copies are included.

Step 5: File and deliver by 31 January

When January arrives, your job should be a final review rather than a research project.

Close December payments. Make sure every payment made by 31 December is recorded.
Refresh totals. Update your tracker and confirm who is over the threshold.
Review each draft form. Check name, TIN, address and the amount in the right box.
File and send. File with the IRS and deliver contractor copies by 31 January, by mail or electronically if the contractor has agreed to that.
Save confirmations. Keep proof of filing and delivery with your year-end records.

Common mistake

Waiting for every last detail before filing anything. If one contractor is still missing a W-9, do not let it delay the other forms. File the ones that are ready on time and work on the problem case separately with your accountant.

A note for UK and European readers

The UK and most European countries do not have a direct equivalent of the US 1099 system. Contractors generally report their own income through their tax returns. That does not mean there is nothing to do: you still need clean records of what you paid each supplier, valid invoices, and a clear view of whether each worker is genuinely self-employed. In the UK, construction businesses and engagements that fall under the off-payroll working rules have their own processes. If you pay US contractors from abroad, or are a US business paying foreign contractors, the forms are different again, so ask an accountant who handles cross-border work.

Your 1099 prep checklist

Export every non-payroll payment made so far this year
Mark payments for services and note how each was paid
Request missing W-9s through a secure method
Check names, entity types and TINs on every W-9
Set up a contractor tracker and update it monthly
Confirm the current threshold and any special cases with the IRS instructions
Choose your filing method and check whether state copies are needed
File with the IRS and send contractor copies by 31 January

Frequently asked questions

Do I need a 1099 for a contractor I paid less than the threshold?

Generally, 1099-NEC reporting applies once total payments to a payee reach the threshold for the year. The threshold rose to $2,000 for payments made from 2026 and will be indexed for inflation, so check the current IRS figure. You can still keep a W-9 on file for every contractor regardless of the amount.

What if a contractor never sends their W-9?

Keep a record of every request you made. Backup withholding rules may apply to future payments if a payee does not provide a TIN. Talk to your accountant before paying that contractor again, and do not let the missing form hold up your other filings.

Is the deadline the same for the IRS and the contractor?

For Form 1099-NEC, yes. Copies are due to contractors and to the IRS by 31 January. Other 1099 forms can have different dates, so check the instructions for any other forms you file.

The bottom line

Preparing 1099s is mostly about information, not math. If you know who you paid, how you paid them and have a correct W-9 for each contractor, the forms almost fill themselves. The work only becomes stressful when it all starts in late January.

Spend an hour this month building your contractor list and sending W-9 requests. By the time the holidays arrive, you will have a short, clean list of forms to file and a calm start to the new year.