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.

AI is amazing. It’s fast, creative, and sometimes eerily insightful. But lately, we’ve noticed more small business owners using ChatGPT like it’s Google — and that’s a mistake.

Let’s clear something up: ChatGPT is not a search engine. It doesn’t “look up” facts on the internet (unless you’re using a paid plan with browsing enabled). It’s a language model — it predicts words based on patterns in data. Used well, it’s a brilliant assistant. Used carelessly, it’s a potential security risk.

As financial advisors, we handle sensitive financial and customer data every day — and we’re seeing more instances where AI use could compromise confidentiality or create exposure risks. In today’s tech-heavy world, knowing how to use digital tools safely is quickly becoming part of the core skill set for business owners.

Here’s what you (and your team) need to know before you feed it sensitive information.

The Free Version of ChatGPT: Helpful but Handcuffed

If you’re using the free ChatGPT (powered by GPT-4-mini as of 2025), you’re essentially driving the demo car. It’ll get you from point A to point B, but you’re missing airbags, seatbelts, and GPS.

Key limitations of the free version

• Limited accuracy and reasoning. GPT-4-mini is faster but less capable than GPT-5. It can give you solid summaries or ideas, but it’s not great at complex reasoning, analysis, or nuanced business writing.
• No file uploads or advanced tools. You can’t share spreadsheets, PDFs, or data for analysis — but you definitely shouldn’t be pasting confidential info here anyway.
• No real-time internet access. The free tier doesn’t browse or fetch live data, so it may provide outdated or incomplete information.
• No enterprise-grade privacy. Conversations in the free tier may be used to improve future models unless you explicitly opt out in Settings.
• No team or collaboration features. Everything happens in your personal workspace, without admin controls or audit trails.

If you’re brainstorming blog titles, it’s great.
If you’re pasting financials or sensitive internal data, stop right there.

Why the Paid Version of ChatGPT is Worth It

The paid versions — ChatGPT Plus, Team, or Enterprise — run on GPT-5-turbo, which is faster, smarter, and far more secure. It’s like upgrading from a bicycle to a Tesla with autopilot and airbags.

Here’s what you get with a paid ChatGPT subscription:

• Access to the most capable model. GPT-5-turbo delivers better reasoning, accuracy, and context — ideal for business use.
• Live data and integrations. You can browse the web in real time, generate charts, analyze data, and connect tools like Google Drive, Slack, and Excel.
• File uploads and analysis tools. Upload spreadsheets, documents, or PDFs for accurate insights — without risking a crash or timeout.
• Enhanced privacy and control. Paid accounts can turn off model training and disable chat history. Your data stays your data.
• Team & Enterprise security. Business accounts offer SOC 2 compliance, Single Sign-On (SSO), centralized admin controls, and role-based permissions.

Think of it this way:
The free version is like chatting in a crowded café where anyone might overhear.
The paid version gives you a private office with the door locked and a security system installed.

Lock It Down: Security Settings You Should Enable

Even with a paid account, security isn’t automatic. You still have to tighten the bolts. Below, we outline four steps to keep your AI-driven work secure.

1. Turn on Multi-Factor Authentication (MFA)

This adds a second layer of protection beyond your password — like a code from your phone or authenticator app. If someone steals your password, MFA keeps them out. Apply it to your ChatGPT log-in, as well as any other digital account you use to run your business or live your life.

2. Control Your Data Settings

Open ChatGPT, head to Settings → Data Controls and:

• Turn off “Improve the model for everyone.” This stops your data from being used for AI training.
• Disable or limit Chat History. Chats without history are not stored long-term.
• Regularly delete old conversations containing sensitive material.

3. Use Temporary Chats for Added Privacy

When you toggle off chat history, conversations aren’t saved — perfect for one-off or private discussions.

4. Never Share Confidential or Private Information

This one’s simple but essential:
Don’t upload or type anything you wouldn’t post on your website.

That means:

• No customer names or numbers
• No proprietary formulas
• No account credentials
• No internal financials or HR data

Once it’s entered, you can’t be certain where it ends up — even if you’re careful.

Smart Use of AI = Safe Use of AI

ChatGPT can save you hours, spark creativity, and improve decision-making — but only if you treat it like the powerful tool it is.

Use it to draft, summarize, brainstorm, and analyze.
Don’t use it to store, process, or transmit confidential business data.

If you’re serious about leveraging AI in your business (and you should be), get a paid account, lock down your settings, and train your team on responsible AI use. Because when you’re paying with your data, “free” AI isn’t that free after all.

Bottom Line

Artificial Intelligence can make you faster, smarter, and more creative — but only if you protect your information while using it.

Treat ChatGPT like you would any other powerful business tool: use it intentionally, configure it securely, and never hand it the keys to your data vault.

Looking to enhance security and reduce risks of data breach, fraud, or phishing? Read our article, “Don’t Click that Sh*t” here.

(With apologies to our nonprofit friends…)

Let’s start with an apology to our nonprofit customers whose world revolves around budgets. We get it — grant compliance demands a budget. You have to show exactly how funds will be spent. Budgets in your world are a necessary evil.

But for everyone else? Let’s be honest: budgets are a waste of time.

In the for-profit world, a budget is like a New Year’s resolution: full of good intentions and forgotten by February. They’re static. You set them, you tuck them away, and you hope they magically keep you “on track.” But a budget doesn’t help you create results; it just tells you how to spend what you already have. With budgets, you aim low to feel safe. You plan for what you think you can do. Then you call it “realistic.”

That’s not how growth happens.

Why Forecasts are More Valuable than Budgets Every Time

A forecast is different. It’s alive. It moves! It changes as you do.

Forecasts are forward-looking. They don’t ask, “What did we spend?” They ask, “What are we going to make happen next?” A forecast…

• tells you how to make a profit.
• gets updated every month as real numbers roll in.
• helps you see trends early and adjust before the year runs off the rails.
• forces you to make decisions — not excuses.

With a forecast, you’re not reacting to last quarter’s mess. You’re designing next quarter’s success.

How to Stop Thinking Like a Budgeter and Start Thinking Like a Forecaster

Step 1: Start with the end in mind. Decide how much profit you want next year — yes, decide. Profit is a choice, not an accident.

Step 2: Work backward. What level of revenue do you need to hit that goal? What will it cost to get there?

Step 3: Update your forecast monthly. When sales shift or expenses change, adjust the forecast and re-aim. The goal is progress, not perfection.

Step 4: Aim high. Budgets play defense. Forecasts play offense. If you want to grow, you have to stop “budgeting” for survival and start forecasting for success.

Here’s the Bottom Line

A budget tells you how to spend your money.
A forecast tells you how to make more of it.

If you’re serious about hitting your 2026 revenue and profit goals, stop budgeting for what’s safe — and start forecasting what’s possible. Reach out to learn more about how we can help create a living forecast that keeps you on track (and off the hamster wheel).

We are pleased to announce that Britney Schaub has earned her designation as a Certified Bookkeeper from the American Institute of Professional Bookkeepers as of October 2025.

Founded in 1987, the American Institute of Professional Bookkeepers (AIPB) certifies bookkeepers who meet high, national standards. To become certified, she was required to have at least 3,000 hours of experience in performing bookkeeping services, to pass a four-part national examination which included testing in the areas of adjusting entries, error correction, payroll, depreciation, inventory, internal controls, and fraud prevention, and to sign a Code of Professional Ethics.

Britney has been part of the New Business Directions team since 2016. She started as our Office Assistant and quickly worked her way up to becoming a certified QuickBooks ProAdvisor. Britney has certifications in QuickBooks Enterprise, Desktop, and Online, as well as BILL, TSheets, Fathom, and Hubdoc. Britney holds a Bachelor’s Degree in Accounting and Finance from Granite State College and now adds Certified Bookkeeper to her list of accomplishments!

Congratulations Britney! We could not be more proud of you. We are delighted that you are a part of our team!

As your business grows, your QuickBooks Desktop Enterprise file can get cluttered—duplicate vendors, overlapping accounts, multiple versions of the same item. That kind of mess slows you down. Merging list items is a powerful way to clean up your QuickBooks data while preserving your transaction history and keeping your books reliable.

In this post and the accompanying the video tutorial, we’ll cover why you should do this, when not to, and how to approach merging with confidence.

Why Merging List Items Matters

Over time, duplicates sneak in. Maybe someone on your accounting team entered “Acme Corp.” as a vendor when “Acme Corporation” already existed. Alternatively, a third-party app integration could have created a new vendor entry instead of reusing yours. That inconsistency causes confusion, misentries, and wasted time hunting for the “right” item during transactions.

When you merge list items properly:

• You consolidate duplicates so your lists stay clean.
• You reduce the risk of picking the wrong vendor, customer, or account during bookkeeping.
• You make your system more intuitive — fewer names, fewer distractions.

When It’s Not Safe to Merge List Items

Not every duplicate should be merged. Be cautious in these cases:

• Different tax or legal identities: If two vendor entries have different tax IDs (e.g. for 1099 filing), keep them separate.
• Distinct roles or histories: If one “duplicate” is really a variation (say, a parent company vs a separate branch) with unique transactions, merging might obscure important details.
• Irreversible actions: Once you merge two items, the change is permanent. There’s no “unmerge” button—so always back up your QuickBooks file first.

When in doubt, a safer alternative is marking one item as inactive instead of merging.

Smart Tips for a Smooth Merge

• Make a backup file first. Don’t skip this step. Since you can’t undo, it’s your safety net.
• Confirm the match: Compare names, addresses, phone numbers, and transaction activity.
• Transfer info carefully: If the duplicate has valid contact info, copy that into the version you’ll keep before merging. Otherwise, that data disappears.
• Only like account types can be merged: Items that are not of the same account type, such as “Other current asset” and “fixed asset” can’t be merged. They must be the same type.
• Watch for integrations: If apps or plug-ins link to list items, double-check after merging so nothing breaks downstream.

What You Can and Can’t Merge

✅ Can Merge:

• Vendors
• Customers
• Chart of Accounts (within same types)
• Inventory and non‑inventory items
• Price levels, fixed asset items, etc.

🚫 Can’t Merge:

• Employees (QuickBooks doesn’t allow it)

A word of caution: merging inventory items can really mess with your average cost (changing your costing method requires IRS approval), so if you’re not sure, don’t do it. 

Merging — when done right — is a practical tool to shape order out of chaos. For your growing business, it’s a way to keep your accounting file leaner, cleaner, and more trustworthy.

Ready to Clean Up Your QuickBooks File?

If you’re over having duplicate list items, confusing entries, or frustration chasing which list item is “real,” here’s your next move: Schedule a Diagnostic Review with our team. We’ll assess your QuickBooks setup, chart of accounts, workflow gaps, and list hygiene — then deliver clear, actionable next steps.

Book Your Diagnostic Review today — let’s bring clarity and confidence to your accounting system.