Dreading 1099 season already?
You’re not alone. Each January, small business owners everywhere panic to locate contractor information, correct typos and beat the IRS deadline. It’s stressful. It’s time-consuming. One typo could cost you real dollars.
Here’s the good news:
Filing your 1099 doesn’t have to be stressful. With a system in place (and, of course, the correct 1099 tax filing software), you can:
- Cut your filing time down to minutes
- Avoid costly IRS penalties
- Keep your contractors happy
And this year, the rules have actually changed in your favour.
Here is how to make it simple…
Inside This Guide:
- Why 1099 Filing Feels So Hard
- The Big 1099 Changes For This Tax Season
- How To Simplify Your 1099 Filing In 5 Steps
- Common 1099 Mistakes To Avoid
Why 1099 Filing Feels So Hard
More businesses are hiring contractors than ever before.
A recent study found that 72.9 million Americans worked independently as contractors in 2025. That’s a lot of freelancers, consultants and gig workers… who may be working for your small business right now.
Every one of those contractors could mean another form to file.
Here’s the problem:
Many small businesses manage contractor payments in chaotic spreadsheets. They send W-9 requests in January and wonder where they went. They manually enter the same information into IRS forms. And then they hope for the best.
That’s a recipe for errors.
Also, the IRS requires you to e-file if you file 10 or more information returns. 10 returns includes W-2s plus 1099s. So if you have 5x employees and 5x contractors, you are required to file electronically only.
Paper filing is becoming extinct quickly. That’s why more and more small businesses are turning to 1099 tax software to prepare, e-file and deliver their contractor forms all in one solution. Top-rated 1099 tax filing software accounts for IRS e-file regulations, so you won’t be surprised by the 10-return limit.
The Big 1099 Changes For This Tax Season
Here’s something a lot of business owners haven’t heard yet…
The 1099 reporting threshold has jumped from $600 to $2,000.
The increase comes courtesy of the One Big Beautiful Bill Act. It affects payments made starting January 1, 2026 — which translates into the forms you file in early 2027. This is the first increase in decades!
So what does that mean for you?
You generally do not have to provide a contractor you paid less than $2,000 in 2026 a 1099-NEC. Fewer forms. Less admin. More time to grow your business.
Pretty cool, right?
But don’t get too excited just yet.
The new threshold applies only to Form 1099-NEC and most boxes on Form 1099-MISC. The other forms that begin with 1099 have different rules. Contractors must still report all income, even if they never receive a form.
There is another change. The Form 1099-K thresholds have returned to $20,000 and more than 200 transactions for payment apps and card processors. This means fewer payments flowing through these platforms will result in a 1099-K.
Bonus: Keep in mind that some states may choose to keep the $600 limit in place. Be sure to check with your state guidelines before determining who doesn’t need a form.
How To Simplify Your 1099 Filing In 5x Steps
Want to make this your easiest tax season yet? Follow these 5x simple steps.
Collect W-9s Before You Pay
This is the #1 habit that saves the most stress.
Request a filled-out W-9 from each new contractor prior to your first payment. You’ll have their legal name/address/tax ID ready to go on day one. Avoid hunting down folks in January once they stop returning your calls.
Track Every Contractor Payment
Maintain a year-long record of how much you pay each contractor. Most accounting programs will automatically flag payments made to contractors.
Why should you care? You need to know specifically who exceeded $2,000. If your records are up to date, this list should take seconds to find — not hours.
Choose The Right 1099 Tax Filing Software
This is where things get really easy.
1099 tax filing software does the complicated work for you. When shopping for tax software, seek out products that allow you to:
- Import contractor data from a spreadsheet or your accounting system
- E-file directly with the IRS (and your state, where needed)
- Mail or email copies to your contractors
- Check tax ID numbers before you submit
- Fix and refile corrections quickly
It’s supposed to be easy. You enter your information once, and the program does the rest.
Check Your Data Before You File
Even the best software can’t fix bad data.
Double-check each and every form before submitting. Verify names, tax IDs and amounts paid. Spend five minutes now and avoid a huge correction project later.
File Early (Don’t Wait For January 31st)
Form 1099-NEC must be filed with the IRS and your contractors by January 31st. And January 31st comes quickly after Christmas.
Goal: file everything away by mid-January. That way you have some leeway for emergencies… such as a contractor who just happens to relocate without notice.
Common 1099 Mistakes To Avoid
Even with a solid system, small slip-ups happen. Watch out for these:
- Getting Form Type Wrong: Contractor pay is reported on Form 1099-NEC. Rent and some other payments are reported on Form 1099-MISC.
- Filing with corporations: Fees paid to most C corps or S corps do not require a 1099. Verify with the W-9.
- Failure to deal with backup withholding: If you never receive a tax ID number from a contractor, you may be required to withhold tax from payments to that contractor.
- Forgetting state filings: Many states want their own copy of your 1099s.
Here’s the kicker…
Rushing causes most of these errors. If you start early and stay organized, you can prevent them.
Bringing It All Together
Filing your 1099 doesn’t have to ruin your January. With the new $2000 limit, many small businesses won’t have to file. And for the ones who do, the right technology makes it quick and painless.
To quickly recap:
- Collect W-9s before you pay anyone
- Track contractor payments all year long
- Use 1099 tax filing software to e-file
- Double-check every form
- File well before January 31st
Keep it simple, start early and this could be your smoothest tax season yet!
Frequently Asked Questions
Do I need to send a 1099 to every contractor?
No. In general, you only send a 1099-NEC for payments made in 2026 to contractors to whom you paid $2,000 or more. Payments to most corporations do not need one.
Can I still file 1099s on paper?
If you are sending fewer than 10 total information returns. Once you reach 10, you must e-file with the IRS.
