Year-End Prep Tip: 1099 Basics Every Business Owner Needs to Know for 2026

Year-end has a way of sneaking up on all of us, and one of the very first deadlines of the new year is 1099s. The good news? A little prep now makes January a whole lot calmer. Here are the basics you need to know.

What's New for 2026

The 1099 reporting threshold has increased from $600 to $2,000 for payments made in 2026. That means fewer vendors will need a 1099 this year, but the ones who do still need accurate, on-time forms.

Who Gets a 1099?

If you paid someone who is not your employee a total of $2,000 or more in 2026 for services (think labor, legal, accounting, consulting, marketing, or repair work), you will most likely need to send them a Form 1099-NEC.

Just under doesn’t count: a vendor paid $1,999.99 does not get a 1099. A vendor paid exactly $2,000 or more does.

Who Doesn't

•Payments made by credit card or PayPal. The card processor or payment platform reports those, not you.

•Vendors taxed as a C or S Corporation, including LLCs that elect to be taxed that way. The exception to the exception: attorneys and medical or health care providers still get a 1099, even if they are incorporated.

•Vendors paid less than $2,000 for the year.

Mark Your Calendar

1099-NEC forms are due to your contractors and to the IRS by Monday, February 1, 2027. (January 31 falls on a Sunday this year.)

Your Quick Prep Checklist

1.Review your 2026 expenses and flag every vendor paid $2,000 or more by check, cash, ACH, or direct deposit.

2.Confirm you have a current W-9 for each one. Missing or outdated? Request a new one now.

3.Decide how you will file (paper forms or software) and note any earlier deadline your software sets. If your business files 10 or more information returns in total (including W-2s and all 1099s combined), you are required to e-file.

4.Plan to process your 1099s early in January so vendors have time to flag any corrections.

Pro Tip: Don’t pay a new vendor until you have a completed W-9 in hand. Future you will thank you in January.

Want the full details, including definitions, additional exceptions, and IRS e-filing rules? Click LINK to read: Year-End Prep Tip #1 – The Complete Guide to Issuing 1099s for 2026.

Rather not deal with 1099s at all? Our Final Form 1099 service takes care of it for you, from vendor review and W-9 collection to e-filing and delivering forms to your contractors. Enrollment opens October 1 and spots are limited. Click to reserve your spot today.

This article is for informational purposes only and should not be construed as business, accounting, or legal advice. Details are subject to change without notice.

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