If you paid anyone $600 or more for services in your business in 2025, the IRS expects a 1099-NEC by January 31, 2026. That includes VAs, contractors, freelancers, consultants, and yes, even lawyers.
Miss that deadline? You’re staring down $60 to $630+ per form in penalties, plus the IRS gets real nosy, real fast.
Who Needs a 1099?
Here’s the quick filter:
You DO need to send a 1099-NEC if you:
Paid someone for services, not just products
Paid via check, direct deposit, or transfer (not PayPal Business or platforms that issue 1099s themselves)
Hired a solo service provider, not a big corporation (with one exception, lawyers)
You DON’T need a 1099 for:
Employees (they get a W-2)
Vendors paid via a platform like PayPal Business (they’ll get a 1099-K)
If You Didn’t Collect a W-9? That’s a Problem
No W-9 = no tax ID = you’re responsible for backup withholding and you’re still required to issue the 1099-NEC. If you don’t, you risk losing that expense deduction, and worse, dealing with the IRS during audit season.
Here’s What to Do Now
Create a report of vendors who were paid $600 or more in 2025. Determine if they should receive a 1099 NEC based on the above criteria. Prepare the returns and mail no later than January 31, 2026. This is my favorite software to prepare 1099 NEC for my clients.
Want to skip the penalty panic and get real tax strategies that save you five to six figures a year?
If you’re running an agency bringing in $500K+ a year, you cannot afford to ignore this. I see smart business owners lose thousands every January simply because they didn’t have the correct strategy.
Let’s talk. Click here to schedule a call and let’s clean this up and plan ahead.