The Independent Contractor 1099 Form: Everything You Need to Know
If you’re a business owner who works with independent contractors, you have some extra tax obligations to think about. One of those obligations is issuing 1099 forms during tax season. These report payments you’ve made to contractors throughout the year.
These forms might seem daunting if you haven’t used them before. Luckily, the process is straightforward once you know the basics.
Learn how to issue a 1099, who should receive one, and some best practices for navigating these forms with confidence.
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Who Needs To File an Independent Contractor 1099 Form?
If you’re a business owner and you’ve paid a contractor $600 or more during the tax year, you likely need to give them a 1099-NEC form. NEC stands for Nonemployee Compensation. This form is mandatory if you’re working with sole proprietors and single-member LLCs—not formal employees.
When you pay employees, you subtract taxes from their checks. But when you pay contractors, you don’t subtract anything. You give them their gross pay, and then they subtract taxes and other deductions themselves.
There are a few common exceptions to these rules. Some include:
Renting From a Property Manager
When you pay rent through a property manager, they send a 1099 to the owner so you don’t have to.
Using Online Freelance Marketplaces
When you use services like Upwork or Fiverr instead of hiring a worker directly, the platform sends out the 1099s. This depends on the service, so check its guidelines.
Employing Workers Classified as Employees
If you hire a worker as an employee, you give them a W-2 form instead of a 1099. This applies even if you only plan to work with them on a temporary contract or for a short time.
The IRS has rules about who’s an employee and who’s an independent contractor. In a nutshell, contractors have control over how they perform their tasks. With employees, you control how, when, and where the work gets done. Make sure you understand the rules thoroughly to avoid penalties or legal issues for classifying someone incorrectly.
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Where To Send 1099 Tax Forms for Independent Contractors

If you choose to file online, you submit the forms through the IRS’s Filing Information Returns Electronically (FIRE) system. Many business owners prefer this method because it’s faster and more secure. It also eliminates the need for Form 1096, which summarizes your 1099 filings. You also have to send copies of 1099s to independent contractors for their own taxes.
If you decide to file paper copies, you mail your 1099 forms, along with Form 1096, to the appropriate IRS center. The mailing address depends on your location, so check with the IRS first. And you also have to mail copies to your contractors.
When To File Your 1099 Form
You must send most 1099 forms to workers and file them with the IRS by January 31 of the following tax year. This is the case whether you file on paper or online. Due dates can differ for other types of 1099s, so check IRS instructions if you need to file any other than the 1099-NEC.
The 1099-MISC, for example, covers other types of compensation, like rent and royalties. The process for filing these 1099s is similar to the process for the 1099-NEC. But you should always double-check IRS guidelines to ensure compliance.
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How To Issue a 1099 Form Step-By-Step

It’s important to manage your 1099s carefully to avoid making costly mistakes. But that doesn’t mean it has to be stressful. When you stick to the steps and understand the requirements, you’ll have a smooth and successful 1099 filing process.
Before you start filling out your 1099 forms, make sure you have Form W-9 from each contractor you’ve worked with in the tax year. The W-9 gives you the contractors’ information, which you need to fill out the 1099. It includes their full name, address, and taxpayer identification number (TIN) or social security number (SSN).
Issuing a 1099 Form Online
With W-9s in hand, here’s how to issue and file 1099s online:
1. Get a Transmitter Control Code (TCC)
You need a TCC to file 1099s electronically. The TCC is a five-digit code that identifies your business. Apply at least 30 days before you intend to file to allow plenty of time to receive it. Validate your identity and fill out an online application. You don’t need to get a new one every year unless you haven’t used it for two consecutive years.
2. Get the Appropriate Form
Business owners new to working with independent contractors sometimes wonder how to create a 1099. But you don’t actually have to do it yourself. Just download the 1099-NEC form from the IRS website. Make sure you choose the correct form for your situation to prevent confusion and delays, because there are other types of 1099s.
3. Fill Out the Form
Learning how to fill out a 1099 form is simple. Using the information from the W-9s, fill out a 1099-NEC form for each contractor. This includes their name, address, TIN, and the amounts you paid them throughout the year.
Complete three copies of the 1099-NEC form for each contractor: Copy A for the IRS, Copy B for the contractor, and Copy C for your own records. You may also need to file another copy (Copy 1) with your state tax department. Double-check the details before filing.
4. Submit the Form to the IRS
Most online filing services submit the form to the IRS on your behalf once you’ve completed it. Otherwise, send it through the IRS website. To avoid late filing penalties, make sure to submit the form by January 31.
5. Send a Copy to the Contractor
Don’t forget to send Copy B of the 1099-NEC form to the contractor. Again, most online filing services will handle this step for you. Make sure the contractor gets their copy by January 31 so they have it for their own tax filings.
Issuing a 1099 Form by Mail
And here’s how to file these forms by mail:
1. Get Physical Copies of the Form
If you prefer to issue physical 1099 forms, start by getting copies. You can order them directly from the IRS website or get them from an accounting firm.
2. Fill Out the Form
Using the information from the contractor’s W-9, fill out each form accurately. Remember to complete Copy A for the IRS, Copy B for the contractor, and Copy C for your records.
3. Submit the Form to the IRS
After completing the forms, mail Copy A of each 1099-NEC to the IRS by January 31. Include Form 1096, which summarizes your 1099 filings. Send the forms early so they arrive by the deadline to avoid late filing penalties.
Keep in mind that you may also need to send Copy 1 to your state tax department, depending on the state you do business in.
4. Send a Copy to the Contractor
Mail Copy B of each completed 1099 to the respective contractor. As with electronic filing, send the contractor’s copy by January 31.
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Setting Yourself Up for Success: What To Do Before Issuing a 1099 Form
Staying organized and proactive for a seamless 1099 filing experience. Here are some ways to make issuing and filing 1099s as painless as possible:
- Collect W-9s Before Making Payments. Request a completed W-9 form from each contractor when you start working with them. This way, you won’t have to scramble for information when it’s time to issue and file 1099s.
- Set Reminders for Important Deadlines. Mark your calendar with the key deadlines for issuing 1099s, such as January 31 for sending forms to contractors and the IRS. Set multiple reminders leading up to these dates so you don’t forget. Timely filing avoids penalties and keeps you in good standing with the IRS.
- Consult With a Tax Professional. If you’re unsure about any aspect of the 1099 process or have a complex tax situation, talk to a professional. They can provide valuable guidance and make sure you’re meeting all your obligations as a business owner.
- Use Accounting Software To Track Payments. Use accounting software to track every transaction. This makes it easier to calculate how much you’ve paid each contractor. Keeping organized records will save you a lot of hassle when it’s time to file.
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Send Professional Invoices to Your Customers
Whether it’s your contractors or your customers, tracking payments is essential for a stress-free tax season. Joist can help.
Create and share invoices in just minutes with Joist’s easy-to-use mobile invoicing tool. Record payments, manage client information, and easily keep track of your monthly sales.