1099-Filings at Year-End: Your Must-Do Checklist for December 2025

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As the year winds down, it’s time to get your 1099 reporting strategy in order. Whether you run a business or a nonprofit, staying compliant with IRS information return rules isn’t optional — and mistakes can be costly.

From collecting Form W-9s from every service provider to understanding which 1099 form applies (and when it’s due), the details matter. This guide walks you through the essential steps for the 2025 tax year, including updated thresholds, key deadlines, and practical tips to streamline your reporting process. Let’s break down what you need to know — and do — before January 31, 2026, rolls around.

1. Collect and Maintain a Form W-9 from Every Service Provider (Mandatory)

You must obtain a completed Form W-9 from every service provider you engage (including sole proprietors, partnerships, corporations, and LLCs) — without exception.

  • The W-9 gives you the name, taxpayer-identification number (TIN), and entity type information you need in order to determine whether you must issue a 1099.
  • If the TIN is a Social Security Number, it must match the person’s name on the W-9 exactly (via IRS TIN matching).
  • If the TIN is an Employer Identification Number (EIN), it must match the business name on the W-9.
  • Retain the W-9 in your records for potential IRS verification; failure to collect may trigger backup withholding or penalties.

2. Understand the Difference Between Forms 1099-NEC and 1099-MISC

  • Form 1099-NEC is used for non-employee compensation — payments for services (including attorneys, contractors, consultants) when made in the course of your trade or business.
  • Form 1099-MISC is used for payments such as rent, royalties, prizes/awards, or other miscellaneous income not reported on another 1099 form.

3. Save These Due Dates for 1099s

For Form 1099-NEC (non-employee compensation): 

  • The IRS instructions state you must file with the IRS on or before January 31, 2026. 
  • You must also furnish recipient copies by January 31, 2026. 

For Form 1099-MISC (rents, royalties, etc.):

  • Recipient copies due by January 31, 2026. 
  • IRS filing: If paper, due by February 28, 2026; if electronic, due by March 31, 2026. 

4. Review Updated Reporting Thresholds and What They Mean for Small Businesses

  • For tax year 2025: the threshold for issuing 1099-NEC or 1099-MISC remains $600.
  • Beginning tax year 2026: the threshold for both 1099-NEC and 1099-MISC will rise to $2,000, and starting in tax year 2027, the threshold will be indexed for inflation. 
  • For Form 1099-K (payments via third-party settlement organizations/payment apps): under the One Big Beautiful Bill Act (OBBBA) the threshold has been restored to $20,000 and 200 transactions (i.e., both conditions must be met) for tax year 2025 and going forward. 

The previously planned lower thresholds (e.g., $2,500 or $600) for 1099-K are not in effect; the higher threshold is back.

5. Know How 1099 Rules Apply to Your Business or Nonprofit

  • You must collect a W-9 from every service provider, regardless of entity type (even if you’re sure they’re a corporation). That gives you the information needed to determine your reporting obligations.
  • If you pay a service provider $600 or more (for services) in 2025, you’ll generally need to issue a 1099-NEC (assuming they’re not treated as a vendor exempt from reporting).
  • If you pay rent, royalties, or other miscellaneous payments under the 1099-MISC rules at or above $600, you must issue that form accordingly.
  • If you pay through a third-party settlement organization (PayPal, Venmo, marketplace platform): you may not receive a 1099-K unless gross payments exceed $20,000 and the number of transactions exceeds 200. Regardless of whether you receive a form or not, all income must be reported on your tax return.
  • Do not rely on whether you receive a form to determine whether you must report income. Receipt of a form is an information aid — your tax-reporting obligation remains irrespective of receiving a 1099.

6. Review this Quick Action Checklist for 1099s at the end of 2025

  • Send W-9s to all service-providers (and securely store them).
  • Review all payments made in 2025 for services, rents, royalties, etc., and determine which ones hit the $600 threshold.
  • Issue required 1099-NEC or 1099-MISC forms by January 31, 2026, and file the IRS copy timely.
  • If you use payment apps or platforms to pay providers or vendors, track the gross payments and count of transactions to each payee — note that they must exceed $20,000 and 200 transactions before a 1099-K will be issued.

Bottom Line

For tax year 2025, the rules are relatively stable: $600 threshold for 1099-NEC/MISC, W-9s required for all service providers, and the 1099-K threshold is back at the $20,000/200-transaction level. Don’t wait until the last minute to start preparing your 1099s—get your W-9s in, identify your payments early, and ensure your records are ready for the January rush.

We’re happy to guide our customers through the process, from verifying vendor details to ensuring accurate filings. Let us take the stress out of 1099 compliance so you can focus on your business as we head into the new year.

Wishing you a smooth year-end, clean filings, and peace of mind.

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