‘Tis the Season… to Prep Your 1099s
- Maddie Craig
- Dec 14, 2025
- 3 min read
Updated: Dec 30, 2025
– BY MADDIE CRAIG | 2025
Santa isn’t the only one who should be making a list (and checking it twice) this December.
If you paid any independent contractors this year, it’s officially time to start prepping your 1099 information.
Most business owners wait until January to deal with 1099s, and that’s exactly why January feels overwhelming. But a little prep in December can make the entire process smoother, faster, and far less stressful.
Here’s what you should be gathering right now so you’re ready when filing opens in January:
*Note: This post focuses specifically on Form 1099-NEC details. Other payments may fall under Form 1099-MISC or other requirements instead - check out the IRS resources linked at the bottom for more details on both!
1️⃣ Make a List of All Contractors You Paid for Services this year
The IRS requires a 1099-NEC for any non-employee you paid:
$600 or more
For services in a single calendar year
Using a 1099-eligible payment method
This includes freelancers, subcontractors, bookkeepers, graphic designers, virtual assistants, etc. - anyone who isn’t on payroll.
2️⃣ Make Sure You Have a Signed W-9 for Each Contractor
This is a big one; and often forgotten until the last minute.
A W-9 provides:
Legal name
Business name (if applicable)
Address
Tax classification
EIN or SSN
Without a completed W-9, you can’t file a 1099-NEC correctly or confirm if they're ineligible. If you haven’t collected W-9s yet, ask for them now - they're also probably in the midst of year-end chaos themselves and it may take time to receive responses!
Additional note: we always recommend collecting a W-9 as soon as you start working with a vendor so eligibility and tax details are confirmed upfront, rather than trying to track that down later.
3️⃣ Calculate the Total Amount You Paid Each Contractor
As you total up payments for each contractor, be mindful that not all payment methods count toward 1099-NEC reporting.
Only include payments you made directly, such as:
Check
ACH or direct bank transfer
Cash
Wire
Payments made by credit card, debit card, or through third-party payment platforms such as PayPal, Venmo, Stripe, etc. should be excluded. These payments are processed by third-party settlement organizations (TPSOs), which are responsible for reporting applicable transactions on Form 1099-K instead from their end.
If the total of your direct payments to a qualifying contractor reaches $600 or more, those payments are generally reportable on Form 1099-NEC, assuming the contractor is not exempt (for example, most corporations).
If you used a mix of payment methods during the year, only count the check, ACH, cash, or wire portions when determining whether the $600 threshold has been met.
4️⃣ What Happens Next: Filing
Once you’ve confirmed eligibility, collected W-9s, and finalized payment totals, the next step is filing the 1099-NECs. Filing typically takes place in January and must be completed by the IRS deadline (generally January 31).
At this stage, we recommend first checking with your tax preparer or payroll provider. Many CPAs, EAs, and payroll services include 1099 filing as part of their year-end services or offer it for a small additional fee. This can simplify the process and help ensure filings are submitted correctly and on time.
If you choose to self-file instead, keep in mind that 1099-NECs must be:
Filed with the IRS
Filed with the state, if your state requires it
Provided to each contractor by the required deadline
Self-filing platforms such as QuickBooks Online or Tax1099.com can assist with generating the forms, submitting them to the IRS and applicable states, and delivering copies to contractors.
Regardless of who handles the actual filing, having your contractor list, W-9s, and payment totals prepared in advance is what makes January far less stressful and helps avoid last-minute issues or missed filings.
A Little Prep Now = A Much Easier January ✨
IRS Resources:
This content is for general informational purposes only and should not be considered legal or tax advice. We recommend consulting with a qualified tax professional regarding your specific situations and needs.
Meet The Author
Maddie Craig is the founder of Blue Cypher Bookkeeping, a detail-oriented bookkeeper, and definitely a “numbers nerd”! She is passionate about helping organizations understand the full story of their financials and using it to make more confident decisions and grow strategically. She has experience working with a wide array of clients, including small businesses and non-profit organizations. When not crunching numbers, she and her husband enjoy traveling, being active in the community, and sharing their love for good food with friends and family.