1099's

Subject: Reminder: Form 1099 Filing Requirement

Dear Client,

As we approach the end of the year 2025, now is a good time to review your business books and records to see if you made payments that require the filing of Information Returns Form 1099.  We have summarized important information for you, from IRS guidelines, to see if you are required to file form 1099.

Tip – Form W-9 should be filled out by each 1099 vendor at the time you engage for services. You should receive a completed W-9 before any payments are made to vendors that are 1099 eligible.  A blank form W-9 is provided for your convenience.

Beginning with tax year 2023, if you have 10 or more information returns, you must file them electronically. This includes Forms W-2, e-filed with the Social Security Administration.

Are you subject to Form 1099-NEC?

File Form 1099-NEC, Nonemployee Compensation (NEC), for each person, in the course of your business, to whom you have paid at least $600 during the year for:

  1. Services performed by someone who is not your employee (including parts and materials).
  2. Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish; or
  3. Payments to an attorney or law firm.

You must also file Form 1099-NEC for each person from whom you have withheld any federal income tax under the backup withholding rules, regardless of the amount of the payment.

Are you subject to Form 1099-Misc?

If, as part of your trade or business, you made any of the following types of payments, you are required to file this form for each person to whom you had paid:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Any fishing boat proceeds.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Section 409A deferrals (box 12);
      • or Nonqualified deferred compensation (box 15).

Payments to a corporation are exempt from reporting on Form 1099-NEC or Misc.  However, the exemption for reporting payments made to corporations does not apply to payments for legal services. Therefore, you must report attorneys’ fees on Form 1099-NEC or Misc. In addition, the following payments made to a corporation must generally be reported on Form 1099-Misc in the following way:

  1. Cash payments for the purchase of fish for resale reported in box 11.
  2. Medical and health care payments reported in box 6.
  3. Substitute payments in lieu of dividends or tax-exempt interest reported in box 8.

Other 1099 Forms that may be required:

  1. 1099 - INT – if you or your company paid more than $10 of interest on a loan or note related to your business or an investment to an individual.
  2. 1099 - DIV- if your corporation paid more than $10 of dividends (also capital gain dividends).
  3. 1099 - R – required if any payments were made from your company sponsored pension plan. Check with your pension administrator to see if they are preparing 1099-R for any distributions made during 2023.
  4. Form 1098 – any mortgage interest payments that you have received (including points) of $600 in the course of your trade or business from an individual, including a sole proprietor.

When do you need to file?

For year 2025: 

  • If you are reporting non-employee compensation (NEC), file on or before January 31, 2026, using either paper or electronic filing procedures.
  • For all other reportable payments, file by February 28, 2026, if you file on paper.
  • For all other reportable payments, file by March 31, 2026, if you file electronically. 

Failure to file information return by due date may result in penalty under IRC Section 6721 of as much as $660 per unfiled form. Additionally, IRS will also charge interest on penalties
 

Tax Year

Up to 30 Days Late

31 Days Late Through August 1

After August 1 or Not Filed

Intentional Disregard

2025

$60

$130

$330

$660

The above information is not exhaustive and is being provided to help you comply with Forms 1098 and 1099 filing requirements, if applicable to you.

What information is required to file 1099-Misc?

If you would like us to prepare and file your 1098 and 1099 forms for you, please complete the attached excel worksheet template. Send it back to us before January 15, 2026 to ensure timely processing of your tax forms.

If our fee for processing your 1099’s is not addressed in your letter of engagement, call our office if you would like an estimate for this service.

Please do not hesitate to contact us if you have any questions.

Here is a link to the IRS website for more general information:

https://www.irs.gov/forms-pubs/about-form-1099-nec

https://www.irs.gov/forms-pubs/about-form-1099-misc

Thank you.

Regards,

Alan Fishman CPA PC