As the calendar year winds down, many small business owners scramble not only to wrap up operations, but to comply with critical tax‑reporting obligations. One of those often overlooked yet essential tasks is issuing and filing the correct Form 1099‑NEC, Form 1099‑MISC or related 1099 series forms for payments made to non‑employee service providers, landlords, attorneys and others.
Getting it wrong or missing it completely – can trigger steep penalties, delay refunds to contractors, and flag your business for additional IRS scrutiny. The good news? With early planning and the right system, you can streamline this process and avoid last‑minute panic.
This article explains who must issue 1099s, what’s changed for 2025, how to steer clear of common mistakes, and how the team at DWG CPA PLLC can make your year‑end filing process smooth, efficient and worry‑free.
If during 2025 you paid $600 or more to an individual or to an unincorporated entity – for services rendered (not goods), you typically must issue a Form 1099‑NEC. Instances include:
On the other hand, payments made via credit‑card or third‑party processors (e.g., PayPal, Venmo Business) are typically reported by the processor under Form 1099‑K, not by your business directly. The IRS confirms these rules.
If you’re unsure how this ties into your bookkeeping vs accounting workflows, our earlier piece “Bookkeeping vs. Accounting: What’s the Difference and Which Do You Need?” is worth a read.
Key Preparation Checklist (before December):
Failing to issue a required 1099 or submitting with errors exposes your business to penalties. Typical penalty levels for late filing include:
And while small businesses often focus on tax‑deductible expenses, the IRS uses mismatches between 1099 issued and 1099 received to flag audits. It pays to get this right.
At DWG CPA PLLC, we treat 1099 compliance as part of our end‑to‑end accounting and advisory service. Here’s what our process includes:
Our approach leverages advisory insights—so this isn’t just about compliance—but about strategic tax saving and minimizing risk. It ties into our broader support framework, such as our blog on “Outsourced CFO vs. In‑House: Which Is Right for Your Growing Business?.”
If you haven’t tracked vendor payments, collected W‑9s or drilled into your books yet, it’s still fixable. Here’s our action path:
Also consider starting the year with our “First 90 Days with an Outsourced Bookkeeping” framework, so your books remain clean, compliant and advisory‑ready.
Before you ring in the new year, make sure you’ve accomplished:
✓ All vendor payments reported and reviewed
✓ W‑9s collected and verified
✓ Correct forms identified (NEC vs MISC vs K)
✓ Payment method categorized (card vs check/ACH)
✓ CPA check‑in scheduled
Issuing and filing 1099s isn’t just a year‑end chore, it’s a responsibility that protects your business, preserves your deductions and sends a signal that you manage your vendor relationships professionally.
DWG CPA PLLC is here to ensure that you get your 1099s done right: early, accurately, and stress‑free. If you’ve been ‘meaning to get to it,’ now is the moment.
Schedule a session with us at dwg.cpa and turn your 1099 filing into a strategic advantag, not just a compliance task.
If you’re building something important and need a trusted financial partner to grow with you – we’d love to hear from you.
DWG CPA PLLC is a Texas-based accounting firm serving businesses and nonprofits since 2005. We specialize in virtual accounting, tax strategies, and personalized financial guidance across industries like healthcare, construction, real estate, and nonprofits.
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