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LearnFAQSelf-Employed & Small Business

Do I have to issue 1099s to people my business pays?

Answer

Often, yes. If your business pays an unincorporated contractor, freelancer, or service provider $600 or more in a year for business services, you generally must issue them a Form 1099-NEC by January 31 and file a copy with the IRS. The smart move is to collect a Form W-9 from every contractor before you pay them, so you have their legal name, address, and tax ID on hand at year-end. Payments to corporations are usually exempt (with some exceptions like attorneys), and payments made through credit cards or third-party platforms are reported by the processor on a 1099-K, so you don't double-report those. Personal payments don't count — only business payments. Missing or late 1099s carry per-form penalties, so build the W-9 step into your onboarding. Keeping clean vendor records all year makes January painless.

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