Every January, business owners across the country scramble to file 1099s for contractors they paid the previous year—and many find themselves unprepared, confused, or facing penalties for missing the deadline.
At Kairo Financial & Advisory, we help clients avoid the January stress by preparing well in advance, organizing contractor data correctly, and ensuring compliance from day one.
If you paid any independent contractors or vendors this year, here’s what you need to know—before it’s too late.
🧾 Who Gets a 1099-NEC?
You’re required to issue a 1099-NEC form to each non-employee (individual, sole proprietor, or single-member LLC) who meets all of the following:
✅ You paid them $600 or more during the calendar year
✅ Payments were made for services, not goods
✅ The payments were made via cash, check, ACH, or direct deposit
✅ They are not an S-Corp or C-Corp (with a few exceptions)
💡 Payments through PayPal or a credit card are reported by the payment processor—not you.
📆 Important Deadlines to Remember
- January 31: Deadline to deliver 1099-NEC forms to contractors
- January 31: Deadline to file with the IRS (paper or electronic)
Miss the deadline? You could face penalties ranging from $60 to $310 per form—and more if there’s willful neglect.
📋 How to Stay Ahead (and Avoid Last-Minute Panic)
Here’s what we recommend at Kairo Financial & Advisory:
1️⃣ Collect W-9s from all contractors—before you pay them.
This gives you their legal name, address, and Tax ID number (TIN) up front. It’s much harder to track down in January.
2️⃣ Track contractor payments separately from vendors or reimbursements.
A bookkeeper can help you set up categories and tags in QuickBooks or Xero to ensure accurate reporting all year.
3️⃣ Verify entity type.
You don’t need to send 1099s to corporations in most cases—but many sole proprietors look like companies. The W-9 clears this up.
4️⃣ Don’t guess—review your vendor list in November.
We recommend running a 1099 eligibility report before year-end to make sure no one is missed.
5️⃣ Use accounting software or a professional to file.
Platforms like QuickBooks can help automate the 1099 process—but errors still happen. We recommend working with a professional to ensure accuracy and peace of mind.
📦 How Kairo Financial & Advisory Helps
✅ Collect and organize W-9s
✅ Run 1099 eligibility reports
✅ Track payments throughout the year
✅ File your 1099s electronically
✅ Coordinate with your tax preparer or CPA
✅ Ensure audit-ready records to support your filings
We take the January crunch off your plate—so you can start the new year focused on growth, not paperwork.
📩 Final Thought
Don’t wait until the new year to clean up last year’s paperwork.
Start now, get organized, and let your 1099s take care of themselves.
📧 Reach out to [email protected] and let us take 1099 compliance off your to-do list—for good.