As a small business owner, staying compliant with IRS regulations is essential—one important task is filing 1099 forms.
This guide will explain what 1099s are, key deadlines, and the three easiest ways to file them.
What Is a 1099 Form?
A 1099 form is an IRS information return used to report non-employee income.
If you paid $600 or more to independent contractors, freelancers, or service providers during the tax year, you must file a 1099-NEC (Non-Employee Compensation) or other relevant 1099 forms.
Learn more from the IRS 1099-NEC page.
Key Deadlines for 1099 Filing
1. Send Copy B to Contractors: January 31
2. File with the IRS:
• Paper Forms: February 28
• Electronic Filing: March 31
Reference: IRSGeneral Instructions for Certain Information Returns.
Three Easy Options for Filing 1099 Forms:
Option 1: File Paper Forms. If you prefer the traditional approach, you can file paper forms.
Here’s how:
1. Order official red-ink 1099 forms and Form 1096 (summary form) from the IRS (Order forms here or by calling 1-800-TAX-FORM (1-800-829-3676).
2. Complete them by hand.
3. mail them to the IRS. (IRS Mailing Address may depend on your state; check the IRS instructions for the correct address).
- Pros: Free forms, straightforward process.
- Cons: Time-consuming, risk of errors, and must be mailed by February 28.
Option 2: Use Your Accounting Software. Many accounting tools streamline the 1099 filing process:
• QuickBooks: Offers a built-in 1099 e-filing service (details here).
• Xero: Integrates with services like Tax1099 (Xero’s 1099 Guide).
• Wave: Export data to a third-party service like Tax1099 (Wave FAQ).
- Pros: Convenient, especially if you already use these tools for bookkeeping.
- Cons: May incur additional fees for e-filing.
Option 3: File Online with a 1099 Service. Online platforms specialize in 1099 preparation and filing:
• eFile4Biz: An IRS-authorized e-filing platform that handles everything from creating forms to submitting them electronically (efile4biz.com).
• Tax1099: Supports multiple 1099 types and offers TIN matching for accuracy (Tax1099).
- Pros: Fast, easy, and secure.
- Cons: Costs range from $2–$5 per form depending on volume.
What’s the Best Option for You?
• Small Volume (1-5 forms): Use paper filing if you’re comfortable managing it yourself.
• Already Using Accounting Software: Leverage your tool’s 1099features for seamless integration.
• Need Fast and Hassle-Free Filing: Go with an online 1099 service.
Staying on top of your 1099 filings not only keeps your business compliant but also strengthens relationships with your contractors. Choose the method that works best for your workflow and meet those deadlines to avoid IRS penalties!
