What Every Small Business Owner Needs to Know if They Issue 1099s: Updates and Deadlines for 2025

If your business issues 1099s, learn what you need to know to be tax-compliant.

Spoiler alert! Tax season is sneaking up!

If you are a small business that issues 1099s, there are a few updates and calendar quirks you’ll want to note and follow! Below is a clear and straightforward guide to help small business owners stay compliant with the IRS and avoid unnecessary penalties.

1099 Forms: Top Takeaways

For payments made in calendar year 2025, most 1099 due dates fall to February 2, 2026, for the recipient and filer, because January 31st falls on a weekend. (Source: IRS)

1. Form 1099-NEC: If you paid $600 or more (increasing to $2K next year) to freelancers, consultants, or independent contractors, the 1099-NEC form is due to the recipient and the IRS typically on January 31, but for 2025 reporting, the due date is February 2, 2026 (next business day after the weekend). No automatic 30-day extension is available for 1099-NEC. (Source: IRS)

2. Form 1099-MISC (non-NEC amounts): If you paid $600 or more (increasing to $2K next year) in payments to a single person or entity, the 1099-MISC form is due to recipients by the January / February deadline that applies, file with IRS on paper by late February and electronically by March 31, 2026 (see chronological list below). (Source: IRS).

Types of miscellaneous income include:

 ~ Rents (Box 1)

~ Prizes/awards; not for services performed (Box 3)

~ Other income payments (Box 3)

~ Medical and healthcare payments (Box 6)

~ Gross proceeds paid to an attorney (Box 10)

3. Form 1099-K: Expect continuing changes to 1099-K reporting thresholds that could affect platform sellers and gig workers; monitor the evolving rulemaking and guidance. (Source: Kiplinger.com)

For third-party payment networks (like PayPal, Venmo, etc.), the reporting threshold has reverted to the pre-2022 level of:

~ Over $20,000 in gross payments; AND

~ More than 200 transactions in a calendar year for 2025.

A 1099 Form from IRS.gov

Small Business 1099s: Key 2025 Deadlines

February 2, 2026

• Provide statements to recipients (most 1099s). (Source: eFile4Biz.com)

• File Form 1099-NEC with the IRS (paper or electronic); no automatic extension.

February 16, 2026

• Some recipient statements, check box-specific rules

• Other information returns (e.g., 1099-B, 1099-S) follow the due dates in the IRS General Instructions; refer to box-specific rules. (Source: IRS)

March 2: Paper / March 31: Electronically

• File Form 1099-MISC (paper). If any return due date falls on a weekend/holiday, the IRS shifts it to the next business day. (Source: IRS)

The 1099 Deadlines (Courtesy: eFile4Biz.com)

Practical Compliance Tips

1. Collect W-9s now from every independent contractor or vendor and ensure you have a TIN (Taxpayer ID Number) on file. Start early, as penalties escalate when forms are missing or incorrect. (See IRS filing instructions for specific box rules.)
   

2. E-file if you hit the threshold. If you file 10 or more information returns, you must e-file (and many filers choose e-file even for fewer returns). E-filing reduces delivery errors and penalties.
   

   

   Ensure Compliance to Avoid Unnecessary Penalties (Image Courtesy: Freepik.com)

3. Watch 1099-K changes. Platforms that issue 1099-Ks are subject to revised thresholds, which may increase the number of sellers who receive one. Keep clear records to reconcile platform reports versus your business books.

4. Correct errors quickly. If you discover an error, file corrected returns promptly; the sooner the better to limit penalties. IRS guidance and Publication 1220 explain electronic formats and procedures.

Summary: Authoritative Resource

• IRS Instructions: Forms 1099-MISC and 1099-NEC (official filing rules).

  
  

• IRS General Instructions for Certain Information Returns (due dates for specific forms/boxes).

  
  

• Publication 1220 (electronic filing specs and record layout).

  
  

• Summaries and Alerts from tax-industry sites (e.g., Tax1099, TurboTax) and news coverage of 1099-K threshold changes.

  
  

• Need additional support and personal guidance? Reach out to Piece of Mind Bookkeeping today by clicking here. We can also:

  • Run a W-9 sweep of your 2025 vendor list.

  • Draft the 1099-NEC/1099-MISC files for e-file; and

  • Reconcile any 1099-K platform activity.

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Piece of Mind Bookkeeping specializes in supporting veterinary practice owners with simple, stress-free bookkeeping and financial management, tax preparation, and compliance with current IRS definitions, limits, and rules to protect your business.

Reach out to us today for a FREE consultation!

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About the Author

Steven Thompson

Founder, Piece of Mind Bookkeeping

Steven brings over a decade of experience in bookkeeping, tax preparation, and financial advisory services. He specializes in helping small businesses (particularly in the pet services and veterinary space) simplify finances so they can grow with confidence.

When he’s not balancing budgets, Steven is exploring his adopted country of Brazil, playing with his dogs, or working on personal development, such as learning yoga.

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