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Business · year-end filings

How to File 1099-NEC for contractors, plus W-2s for employees

How to file 1099-NEC without a January rush: collect W-9s in December, check who crossed the $2,000 threshold, and file online by January 31 — with the IRS and with each contractor. We do all of it for you and prepare W-2s as part of payroll. 1099-NEC preparation is $30 per form.

Who needs to file 1099-NEC and W-2

You paid contractors $2,000 or more
If in 2026 your business paid a contractor that isn't a corporation $2,000 or more for services, you file a 1099-NEC for them. Before 2026 the threshold was $600.
You paid an attorney
Legal fees of $2,000 or more go on a 1099-NEC even when the law firm is a corporation.
You have employees on payroll
Every employee gets a W-2, and a copy goes to the Social Security Administration by January 31. For our payroll clients this is part of the monthly service.
Not sure who's a contractor and who's an employee
If someone works on your schedule with your tools, they may be an employee rather than a contractor. We sort this out before filing, and if you need payroll, we set it up.

What our 1099-NEC filing includes

A W-9 from every contractor
We request Form W-9 from your contractors early — in December or at the first payment — and check the name, address and taxpayer identification number (TIN).
The payee list and amounts
From your books or bank statements we find everyone you paid $2,000 or more. Card payments and third-party network payments are left out: the payment company reports them on a 1099-K.
E-filing with the IRS and copies to contractors
We e-file your 1099-NEC forms with the IRS and send each contractor a copy by January 31.
W-2s and W-3 for employees
For payroll clients we prepare a W-2 for every employee and file them with Form W-3 with the Social Security Administration.

Form 1099-NEC for 2026: threshold, deadline, e-filing

threshold
$2,000
per payee for the year, for payments made after December 31, 2025. It used to be $600; from 2027 the amount will be adjusted for inflation.
deadline
Jan 31
to the IRS and to the contractor. For 2026 forms it's February 1, 2027, because January 31 falls on a Sunday.
e-file
10 forms
If you have 10 or more information returns for the year — 1099s, W-2s and others combined — you must file them electronically.

How to file 1099-NEC for contractors: 4 steps

Start in December, not at the end of January: by January all W-9s are in hand, and all that's left is to check the amounts and file.

01

December: the contractor list

We list everyone your business paid for services and request W-9s from anyone who hasn't sent one yet.

02

Early January: checking the amounts

We match the amounts to your books and statements, remove corporations and card payments, and apply the $2,000 threshold.

03

By January 31: filing

We e-file the 1099-NEC forms with the IRS and send a copy to each contractor. Employee W-2s go out on the same schedule.

04

After filing: corrections

If a contractor reports an error or the IRS rejects a form, we file a corrected 1099-NEC. Copies of the forms and W-9s stay in your client portal.

1099-NEC preparation — $30 per form. In our PREMIUM bookkeeping package, 1099 preparation is already included. W-2s are part of the monthly payroll service — $150/mo for up to 3 employees. Bookkeeping prices → · Payroll prices →

What to prepare for 1099s and W-2s

A list of contractors and amounts for the year — or access to your books
Contractors' W-9s, if you already have them
Your business's legal name, address and EIN
For W-2s — access to payroll or a record of employee pay for the year

1099-NEC filing FAQ

Who has to file Form 1099-NEC for 2026?

Any business that paid a single contractor $2,000 or more for services during the year. That's the change made by the One Big Beautiful Bill Act: for payments made after December 31, 2025, the threshold went up from $600 to $2,000, and starting in 2027 it will be adjusted for inflation. Personal payments unrelated to your business are not reported on a 1099-NEC.

When is Form 1099-NEC due?

January 31 — both to the IRS and to the contractor. When a deadline falls on a weekend, it moves to the next business day, so forms for 2026 are due February 1, 2027. We recommend collecting W-9s in December so that January is only about filing.

Do I file a 1099 for a corporation or an LLC?

Generally not for a corporation, including an LLC taxed as a C or S corporation. For a single-member LLC or a partnership, yes. The exception is legal services: payments to attorneys go on a 1099-NEC even if the law firm is a corporation. The contractor's W-9 shows how they are taxed.

I paid by card or through a payment service. Do I need a 1099-NEC?

No. Payments made by credit or debit card or through a third-party payment network are reported on Form 1099-K by the payment company, so they don't go on a 1099-NEC. Payments by check or bank transfer do.

A contractor won't give me a W-9. What now?

Without a taxpayer identification number (TIN), you have to withhold 24% from payments — backup withholding — until the contractor provides one. For that contractor you file a 1099-NEC regardless of the amount paid. That's why it's best to get a W-9 before the first payment.

Can I file 1099-NEC online, or on paper?

If your business has 10 or more information returns for the year — 1099s, W-2s and others combined — you must file electronically. The IRS's free system for this is IRIS: 2026 forms are filed through it, and the older FIRE system stops accepting filings on November 19, 2026.

What's the penalty for filing a 1099-NEC late?

The penalty is charged per form and grows with time. For forms due after December 31, 2026, it's $60 if you're up to 30 days late, $130 if you file later but by August 1, and $340 after August 1 or if the form is never filed. For intentional disregard it's at least $690 per form, with no cap.

Do you file W-2s too? How much does it cost?

Yes, for our payroll clients: W-2 preparation is included in the monthly payroll service — $150 a month for up to 3 employees. W-2s go to employees and, with Form W-3, to the Social Security Administration by January 31. Extensions for W-2s are not automatic: the IRS grants them only in extraordinary circumstances.

Related services: Payroll Bookkeeping IRS notices & tax debt

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