1099s: Who, What, When, Where, Why & How (2025)
Let’s break down the important information regarding Form 1099s.
Key Terms:
IRS – The federal agency responsible for collecting taxes.
Subcontractor – A non-employee (individual or business) providing services for your company. If they are not incorporated and you paid them over $600 this year, you must issue a 1099.
Form W-9 – Used to collect a contractor’s Taxpayer Identification Number (TIN) and tax classification. Required before payment. Keep on file even if a vendor is incorporated.
Form W-8BEN – Used for foreign contractors instead of a W-9.
Form 1099-NEC – Reports payments to independent contractors. Must be filed by January 28, 2026.
Form 1099-MISC – Reports other payments such as rent or attorney fees. Also due January 28, 2026.
Who gets a Form 1099?
You must issue a Form 1099-NEC to anyone not on payroll that you paid over $600 (via cash, check, Venmo, Zelle, etc.). Form 1099-MISC must be issued for rent and attorney gross proceeds.
Cleaning services
Designers & IT professionals
Photographers & virtual assistants
Bookkeepers & accountants
Attorneys (legal fees)
Consultants & business coaches
Installers (tile, carpet, appliances, etc.)
Consignment vendors
👉 Tip: Always collect a completed W-9 before paying a vendor.
What is the difference between a Form W-9 and a Form 1099?
Form W-9: Completed by the vendor, provides their TIN and tax status.
Form 1099: Completed by you, reports payments to the IRS, state, and vendor.
👉 Tip: For foreign vendors, collect a Form W-8BEN instead.
When are Form 1099s Due?
Business by the Book begins Form 1099 prep in October. All 2025 1099s must be filed by January 28, 2026.
When and how are my Form 1099s filed?
We use QuickBooks Online to track vendors and file 1099s.
👉 Note: Payments made via credit card are reported by the card company. You only report payments made by cash, check, or transfer apps.
Why are Form 1099s important?
Ensures income is reported correctly to the IRS.
Helps your CPA maximize deductions on your tax return.
Protects you from penalties for non-compliance.
Will you receive a Form 1099?
If you’re an LLC or sole proprietor providing services to another business, you likely will. For example, if you are an interior designer decorating a company office, you should receive a 1099, but not if designing for a private family.
Questions?
If you have questions about Form W-9s, Form 1099s, or how Business by the Book can assist you, please contact your Client Service Manager (CSM) (formally called Account Manager). You can also always submit questions or concerns to our general inbox: info@businessbythebook.money.
Stay tuned for more details on filing your 2025 Form 1099s!
