1099 Forms

As we step into 2025, business owners must prepare for one of their critical annual responsibilities: filing 1099 forms. Whether you’re a seasoned entrepreneur or a new business owner, understanding how to handle 1099s can save time, reduce errors, and help you avoid penalties. This blog walks you through everything you need to know for 2025, including key updates and actionable steps. Below is a quick summary of what you’ll find: What is a 1099 Form? A 1099 is a tax form that businesses use to report certain types of payments to the IRS. Unlike employee wages, which are reported on W-2 forms, 1099 forms are used for non-employee income. The most common 1099 forms include: Key Changes to 1099 Filing in 2025 Several changes have been introduced in recent years that affect how businesses file 1099s: Who Needs a 1099? You must issue a 1099 form to anyone you paid over $600 in 2024 for: Exceptions to 1099 Requirements: Steps to File Your 1099s in 2025 Filing 1099s involves several steps, but staying organized makes the process much easier. Here’s what you need to do: Step 1: Collect Information Early Request a completed W-9 Form from every contractor or vendor before making payments. This form contains essential information like: Step 2: Track Payments Throughout the year, use accounting software like QuickBooks to track payments to contractors and flag those requiring a 1099. Accurate bookkeeping ensures you don’t miss anyone.Make sure that banks and cash in safe are completely reconciled with the accounting software. Step 3: Verify TINs Use the IRS TIN Matching Tool to confirm the accuracy of Taxpayer Identification Numbers. This reduces the risk of errors when filing. Step 4: Choose a Filing Method You can file your 1099s in one of two ways: Step 5: File by the Deadlines Step 6: Retain Records Keep copies of all 1099 forms and related records for at least three years in case of an audit. Best Software for Filing 1099s To make the filing process more manageable, several software options are available to streamline your 1099 reporting: Avoid Common Mistakes Avoiding errors is just as important as meeting deadlines. Here are the most common mistakes and how to avoid them: Simplify 1099 Filing with MontPac Navigating 1099 filing requirements can be daunting, especially with changing regulations and tight deadlines. MontPac offers expert assistance to help businesses streamline this process: With MontPac, you can focus on growing your business while we take care of your 1099 filing needs.