January 1099s are only ever as good as the records kept during the year. Nearly every painful filing season traces back to the same two omissions: no W-9, and no way to tell how someone was paid.
The W-9 comes before the first payment
Ask for Form W-9 when you engage someone, not when you pay them and certainly not in January. Before the first check you have leverage and their attention; eleven months later you may have neither, and a missing taxpayer identification number can put you into backup withholding. Keep the W-9 on file, and ask for a fresh one when a business changes its name or entity type.
The threshold changed
The long-standing $600 reporting threshold was raised: under P.L. 119-21, section 70201, the threshold for these information returns increased to $2,000 for payments made after December 31, 2025, and it may be adjusted for inflation beginning in calendar year 2027. For payments made during 2026, that is the figure to track against.
The practical consequence is not to track less. Track every vendor payment as you always did; the threshold decides which vendors produce a form, and it is far cheaper to have the data and not need it than the reverse. Thresholds also differ by box and payment type, so the current instructions are the thing to check rather than memory.
How they were paid matters
Payments made by credit card, debit card or a third-party payment network are reported by the processor, not by you — including them in your own 1099 totals reports the same money twice. This is exactly what the books are for: if every payment carries its method, the year-end vendor report separates cash and check payments from card payments without anyone reconstructing it.
Deadlines
Form 1099-NEC is filed and furnished by January 31. When that date falls on a weekend or holiday the deadline moves to the next business day — for 2026 payments, January 31, 2027 is a Sunday, so the date to work back from is Monday, February 1, 2027. Form 1099-MISC has its own later filing dates, earlier for electronic filers. Build the vendor review into the December close, not into the last week of January.
Contractor or employee is not a bookkeeping decision
Whether someone is a contractor or an employee turns on how the work is controlled, and getting it wrong is expensive in back taxes and penalties. That determination belongs to your CPA or employment attorney, working from the IRS guidance. What the books do is make the pattern visible — a "contractor" paid the same amount every week for a year is a question worth putting in front of them.
The file to keep for each contractor
- The signed W-9, with the current legal name, entity type and TIN
- The agreement or scope, even a one-page one
- Their invoices, and proof of each payment with its method
- A certificate of insurance where the trade or your own insurer requires one
- A current mailing address for the form itself
We prepare and reconcile the vendor totals as part of the year-end close, so the data going onto the forms matches the books. The filing itself is done by your CPA or a filing service — we don't prepare tax filings. See how we work for where those lines fall.
