Do I Need to Send a 1099 (or Should I Expect to Receive One)?
If you’re a business owner who hired contractors this year, or if you are a contractor, you’re probably wondering:
Do I need to send a 1099? Should I expect to receive one?
The short answer is—it depends. Here’s a quick guide to help you understand what to expect, when to send it, and what the IRS requires.
As always, consult your tax professional for advice specific to your situation.
What Is Form 1099-NEC?
Form 1099-NEC (Nonemployee Compensation) is used to report payments made to independent contractors and freelancers for services—not employees.
In 2020, the IRS moved this reporting off of the old 1099-MISC and onto a new form, 1099-NEC, which is now the standard for service-based contractor payments.
So if you paid someone $600 or more during the year for services related to your business, you may need to issue them a 1099-NEC.
This is how the IRS tracks income paid to non-employees—and how they make sure it’s being reported and taxed.
Who do I send it to?
Think about who you paid to help support your business:
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Virtual assistants
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Graphic designers
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Bookkeepers or accountants
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Social media managers
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Coaches or consultants
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Contractors who helped you with physical work (like painting your office or building your website)
If you paid $600 or more to an individual or LLC via cash, check, or bank transfer (ACH)—you’ll likely need to send them a 1099-NEC by January 31st.
You do NOT need to send a 1099-NEC if:
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You paid the person via PayPal or credit card (they’ll receive a 1099-K instead)
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The contractor is registered as a C Corporation/ S Corporation (with a few exceptions like legal or medical services)
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You paid under $600 total for the year
Who would send one to me?
If you work as a contractor, freelancer, or provide business services and made $600 or more from any one client (outside of PayPal/credit card), they should send you a 1099-NEC by January 31.
Keep in mind:
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If you received several 1099s, make sure you don’t double-report the same income
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Even if you don’t receive the form, you’re still required to report all income
This is where strong bookkeeping helps—track who paid you and how much so you know what to expect come tax season.
What About 1099-K?
If you got paid via credit card or a third-party processor like PayPal or Stripe, those platforms handle the reporting and will send you a 1099-K—but only if your earnings exceed a certain threshold (currently $600 federally, but some states have different limits).
Just remember: Even if you don’t hit the 1099-K threshold, you still need to report that income.
What About Other 1099 Forms?
There are 30+ different versions of 1099 forms—most of which you’ll never need to worry about. But here are a few that pop up in special cases:
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1099-DIV: For dividend income from stocks
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1099-INT: For interest earned on bank accounts
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1099-C: For canceled debts
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1099-S: For real estate transactions
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1099-G: For government payments like refunds or unemployment
But for most small business owners and service providers, 1099-NEC and 1099-K are the ones to watch.
Need Help Staying on Top of All This?
You don’t have to figure this all out alone. If you’re building a business and need help understanding your finances, staying organized, and avoiding IRS stress…
Come join the House of CEO.
Inside the membership, you’ll find:
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Simple templates for tax and bookkeeping tasks
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A DIY 1099 prep checklist
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Tools to track what you paid (and what you got paid)
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Trainings that help you run your business with clarity—not confusion
Ready to feel confident about your business numbers? JOIN THE HOUSE OF CEO WAITLIST
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