Tax Optimization

Your 2025 Tax Guide: How and When to File Your 1099 Form

Learn how to file your 1099 form with this 2025 tax guide. Discover who needs to file, step-by-step instructions, and essential tips for small businesses.

At LedgerFi, we understand the importance of staying on top of tax filing requirements. This guide will help you issue 1099 forms in 2025. It covers who must file, how to file, the deadlines, and the penalties for missing them. Let's get to it!

Who Needs to File a 1099 Form?

A 1099 form reports various types of income paid to people or businesses that are not employees. Common scenarios include:

  • Payments to independent contractors or freelancers totaling $600 or more during the year.
  • Rent payments for business property.
  • Interest, dividends, or royalties exceeding certain thresholds.
  • Payments to attorneys or legal firms.

Here are the most common 1099 Forms (yes there are a lot more): 

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  • 1099-NEC (Nonemployee Compensation)
  • 1099-MISC (Miscellaneous Income)
  • 1099-DIV (Dividends and Distributions)
  • 1099-INT (Interest Income)
  • 1099-K (Payment Card and Third-Party Network Transactions)

We also get this question a lot: Do S-corporations receive 1099s? In most cases, payments to S-corporations or C-corporations are exempt unless they involve legal or medical services. Double-check your records and confirm the recipient’s business structure before filing.

How Do I Fill Out a 1099 Form?

5 Tax strategies

Filing a 1099 IRS form can seem daunting, but it’s manageable if you follow these steps:

  1. Gather Necessary Information:
    • What information is needed for a 1099? The answer to that depends on which 1099 you are filing. 
    • However, there are some common elements that many of these forms include, such as: the payer and recipient’s legal name, taxpayer identification number (TIN), and address. They will also include the payment information and tax year the transaction occurred. 
    • Each form listed above focuses on specific types of income or transactions, so the required details depend on the nature of the payment or distribution being reported. Ensure all payment records are accurate and up-to-date.  You’ll need this information in a W-9 for all 1099 Forms. 

  2. Choose the Right Form:
    • Choosing the correct 1099 form depends on the type of income or transaction you're reporting. Use 1099-MISC for rent, royalties, and other miscellaneous income and 1099-NEC for non-employee compensation. 
    • Investment earnings are reported on 1099-DIV for dividends or 1099-INT for interest income. Specialized forms like 1099-K handle payment card transactions, 1099-R reports retirement distributions, and 1099-S is for real estate sales. Double check the list above for more and always match the form to the income type to ensure accurate reporting and avoid penalties.

  3. Verify State Filing Requirements:
    • Check the 1099 filing requirements by state to ensure compliance with state tax laws.

  4. Fill Out the Form:
    • Include all the payer and recipient information you gathered and organized, the payment amount, and the purpose of the payment.

  5. Submit the Form:
    • Send a copy to the IRS and the recipient. You can complete this via mail or by preparing 1099 forms online, which often proves faster and more secure. 
    • If a company issues more than 10 information returns (total 1099 & W2s) per year, they are required to file everything electronically and can be penalized for mailing the forms in.

Key Deadlines for 2025

The 1099 filing deadline 2025 is critical to avoid penalties:

  • January 31, 2025: Deadline to send 1099 forms to recipients.
  • February 28, 2025: Deadline for paper filing with the IRS.
  • March 31, 2025: Deadline for electronic filing with the IRS.

Missing these deadlines could result in fines, so mark your calendar now!

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Penalties for Missing the 1099 Filing Deadline

Failing to meet the 1099 filing deadline 2025 can lead to steep penalties. These penalties increase the longer your filing is delayed:

  • $60 per form if filed within 30 days of the deadline.
  • $130 per form if filed after 30 days but before August 1.
  • $330 per form if filed after August 1 or not filed at all.

Penalties double in cases of intentional disregard. Don’t let these costs pile up—file on time!

What Happens If You Don’t File a 1099?

Neglecting to file can trigger additional penalties and strained business relationships. It can even lead to IRS audits if you have marked that you did file 1099's on the tax return, but you didn't actually submit them. If you’re unsure about your filing obligations, seek professional assistance to avoid costly mistakes.

Tips for a Smooth 1099 Filing Process

Here are some 1099 filing tips for small businesses to streamline the process:

  1. Maintain accurate and organized payment records throughout the year. Accurate bookkeeping and accounting year round ensures that you’re ready to file the 1099s in January.  Inaccurate bookkeeping can lead to inaccurate 1099s, penalties from the IRS, and increase the risk for audits. 
  2. Request completed W-9 forms from contractors and vendors at the start of your working relationship.
  3. Use online tools and software, like Avalara’s Track1099, to prepare 1099 forms. This will save you time and reduce mistakes.
  4. Double-check state-specific requirements to ensure full compliance or chat with a tax professional to ensure you're filing correctly.

Final Thoughts

Filing your 2024 1099 form doesn’t have to be overwhelming! By following this guide, you can ensure compliance with IRS regulations and avoid penalties. If you need help, our amazing team at LedgerFi is here to help.

In the meantime, for more resources and updates, check out our IRS Library or contact us today!

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