Filing a 1099 starts with collecting the right information from everyone you paid, choosing the correct form type, and submitting it to the IRS by the deadline. If you paid an independent contractor, freelancer, or other non-employee $2,000 or more during the tax year for services, you’re required to report those payments. The process is straightforward once you understand the steps, and the IRS offers a free online portal to handle the filing.
Collect W-9 Information First
Before you can file any 1099, you need each payee’s tax details. The tool for this is Form W-9, which you should request from every contractor or vendor before or shortly after you start paying them. Don’t wait until January to ask for this information, as chasing down contractors after the fact is one of the biggest headaches in the process.
A completed W-9 gives you everything you need to fill out a 1099: the payee’s legal name (as it appears on their tax return), their business name if different, their mailing address, their taxpayer identification number (either a Social Security number or an employer identification number), and their federal tax classification (sole proprietor, LLC, corporation, partnership, etc.). The payee also certifies under penalties of perjury that the information is correct and indicates whether they’re subject to backup withholding.
One important detail: you generally don’t file 1099s for payments made to C corporations or S corporations. The tax classification on the W-9 tells you this. If a vendor checks “C Corporation” or “S Corporation,” you can typically skip reporting their payments. The main exceptions are payments for legal services (report those regardless of corporate status) and medical/health care payments.
Pick the Right 1099 Form
The two most common versions are Form 1099-NEC and Form 1099-MISC, and they cover different types of payments.
Form 1099-NEC is for nonemployee compensation, meaning payments for services performed by someone who isn’t your employee. This covers freelancers, independent contractors, subcontractors, and similar workers. You file a 1099-NEC when you’ve paid $2,000 or more to a single payee during the tax year. This threshold increased from $600 for tax years beginning after 2025, so fewer payments now trigger a filing requirement.
Form 1099-MISC covers other types of income: rent payments, royalties, prizes and awards, payments to attorneys for legal services (gross proceeds), crop insurance proceeds, and medical/health care payments. The thresholds vary by payment type. Rent, prizes, and medical payments trigger filing at $2,000 or more. Royalties trigger filing at just $10 or more. Gross proceeds paid to attorneys still use a $600 threshold.
If you’re a typical small business paying freelancers or contractors, you’ll almost certainly be filing 1099-NEC forms. The 1099-MISC applies in more specialized situations like paying rent to a landlord for office space or distributing royalties.
Key Deadlines
Form 1099-NEC is due to the IRS and to your payees by January 31 of the year following the payments. There’s no automatic extension for 1099-NEC, so this date is firm. Form 1099-MISC is also due to payees by January 31, but the IRS filing deadline is February 28 if you file on paper, or March 31 if you file electronically.
Missing these deadlines triggers penalties that escalate the longer you wait. The IRS charges $60 per form if you’re up to 30 days late, $130 per form if you’re 31 days late through August 1, and $340 per form after August 1 or if you never file. Intentional disregard of the filing requirement bumps the penalty to $680 per form. These add up fast if you have multiple contractors.
Electronic vs. Paper Filing
If you file 10 or more information returns in a calendar year, you must file electronically. That 10-return threshold counts across all return types combined, including W-2s. So if you issue five W-2s to employees and five 1099-NECs to contractors, that’s 10 returns, and you’re required to e-file all of them.
If you file fewer than 10 total returns, you can choose either paper or electronic filing. Even if paper is an option for you, electronic filing is faster, reduces errors, and gives you confirmation that the IRS received your forms.
How to File Through the IRS IRIS Portal
The IRS offers a free electronic filing system called the Information Returns Intake System (IRIS) Taxpayer Portal. It’s web-based and works well for small businesses that don’t want to pay for third-party software.
To get started, you’ll need an IRIS Transmitter Control Code (TCC), a five-digit number that identifies your business when you e-file. You apply for this through the IRS, and it can only be used for IRIS filings. Plan ahead here, as getting your TCC approved can take time, so don’t wait until the last week of January to set this up.
Once you have your TCC and sign into the portal, you can enter 1099 data manually or upload it via a CSV file. The portal lets you file up to 100 returns at a time. After submitting, you can download payee copies to distribute to your contractors, and the system keeps records of what you’ve filed. It’s a surprisingly capable tool for being free.
Larger businesses that process high volumes of returns can use IRIS Application to Application (A2A), which connects accounting software or third-party services directly to the IRS system through an API. Setting up A2A requires applying for a separate TCC, obtaining an API Client ID, getting the schema package, and passing assurance testing before you can transmit live data.
Using Third-Party Software or Services
Many businesses skip the IRS portal and use payroll software, accounting platforms, or dedicated 1099 filing services instead. These tools pull payment data from your bookkeeping records, auto-populate the forms, e-file with the IRS, and mail or email copies to your payees. The convenience comes at a cost, typically a few dollars per form, but for businesses with many contractors it saves significant time.
If you use an accountant or bookkeeper, they can handle the entire process. Just make sure they have W-9s on file for all your payees and accurate payment totals for the year.
Sending Copies to Payees
Filing with the IRS is only half the job. You’re also required to send a copy of each 1099 to the payee so they can use it when filing their own tax return. The deadline for getting copies to payees is January 31, same as the IRS deadline for 1099-NEC.
You can deliver payee copies by mail or, if the recipient consents to electronic delivery, by email or through a secure portal. The IRIS system generates downloadable payee copies you can print and mail. If you’re using third-party software, most services handle distribution automatically.
What to Do If You Make a Mistake
If you file a 1099 with incorrect information, such as a wrong dollar amount, wrong TIN, or wrong payee name, you’ll need to file a corrected return. On the corrected form, check the “CORRECTED” box at the top. The IRS IRIS portal and most third-party filing services support corrections. File the corrected version as soon as you discover the error. You’ll also need to send an updated copy to the payee. Correcting promptly can help you avoid or reduce penalties for incorrect returns.