Guide · 7 min read · November 7, 2026
1099 readiness checklist: W-9s and vendor records before January
January 1099s are won or lost in November. For 2026 payments, the threshold for most Form 1099-NEC and 1099-MISC reporting rose from $600 to $2,000, which changes who needs a form. This guide covers who gets one this year, how to clean up your vendor records, and a week-by-week plan for collecting W-9s before the February 1, 2027 deadline.
What's inside
- · Which forms apply and what changed for 2026 payments
- · Who needs a 1099 and who doesn't
- · How to build a vendor list you can trust
- · Collecting W-9s without chasing contractors in January
- · A November-to-February timeline and what to hand your CPA
What changed for 2026 payments
For payments made in 2026, the IRS raised the reporting threshold for nonemployee compensation on Form 1099-NEC from $600 to $2,000. The same $2,000 floor now applies to rents, other income, and medical and health care payments on Form 1099-MISC. Royalties still trigger a form at $10, and gross proceeds paid to attorneys still use $600. The IRS says the $2,000 amount may be adjusted for inflation starting in 2027, so check the current instructions each year.
Fewer contractors will cross the line, but the work doesn't disappear. You still need a clean record of who you paid, how you paid them and what kind of entity they are, because that is what decides whether a form is required. The rules come from the IRS Instructions for Forms 1099-MISC and 1099-NEC.
| Form | Common payments | Threshold for 2026 payments | Who sends it |
|---|---|---|---|
| 1099-NEC | Contractor and freelancer fees, attorneys' fees for services | $2,000 | You, to the contractor and the IRS |
| 1099-MISC | Rent, other income, medical and health care payments | $2,000 | You, to the payee and the IRS |
| 1099-MISC | Royalties | $10 | You, to the payee and the IRS |
| 1099-K | Payments you made by card or through a third-party payment network | Not your form | The payment processor |
Who needs a 1099, and who doesn't
Eligibility turns on two things: what the payee is for tax purposes, and how you paid them. Sort every vendor into one of these groups before you think about forms.
Individuals, sole proprietors and partnerships
Generally yes, once your 2026 payments to them for services reach $2,000. That includes LLCs taxed as sole proprietorships or partnerships.
Corporations
Generally no, including LLCs taxed as C or S corporations. The big exceptions are attorneys' fees and medical and health care payments, which are reportable even when the payee is incorporated.
Card and payment network payments
If you paid by credit card, debit card or a third-party payment network, the processor reports it on Form 1099-K. Leave those payments out of your 1099-NEC and 1099-MISC totals.
Contractors outside the US
A contractor who is not a US person generally gets no 1099. Collect a Form W-8BEN instead to document their foreign status, and confirm the treatment with your CPA.
Build a vendor list you can trust
Most 1099 problems start in the vendor list, not the forms. Duplicate vendors split one contractor's payments in two, missing tax IDs hold everything up, and card payments get counted twice. Work through these steps in your accounting system before you request a single W-9.
- 01
Export every 2026 payment by vendor
Run a report of all payments by vendor for the year to date, with the payment method included. QuickBooks Online, Xero and most other systems can produce this in a few clicks.
- 02
Merge duplicates and fix names
Combine vendors that appear twice under slightly different names, and make sure each vendor's legal name matches its W-9, not just its brand or trade name.
- 03
Separate card and processor payments
Tag payments made by credit card, debit card or a payment network so they drop out of your 1099 totals. The processor reports those on Form 1099-K.
- 04
Flag who is 1099-eligible
Mark each vendor as eligible or not based on its tax classification and what you paid it for. Attorneys stay eligible even when they are incorporated.
- 05
Map payments to the right box
Fees for services go to Form 1099-NEC box 1a. Office or equipment rent goes to Form 1099-MISC box 1. Getting this right now saves reclassifying transactions in January.
- 06
List the gaps
Finish with a short list: vendors at or near $2,000 with no W-9, W-9s that no longer match the vendor's current name, and payments you aren't sure how to classify. That list drives the next two months.
Collect W-9s before you need them
Form W-9 gives you a vendor's legal name, federal tax classification and taxpayer identification number (TIN). The current version is the March 2024 revision. You keep completed forms in your own records; they aren't sent to the IRS.
- Request a W-9 when you onboard a vendor, before the first payment, and make it a condition of getting paid.
- Check that the name and TIN are filled in and that the tax classification box is marked. An LLC has to say how it is taxed.
- If you file regularly, the IRS TIN Matching e-service lets you check name and TIN combinations against IRS records before you file.
- Store W-9s securely and limit access to the people who need them. Each one contains a tax ID.
- If a contractor won't provide a TIN, you're generally required to start backup withholding at 24% on reportable payments. Saying so up front usually ends the delay.
A November-to-February timeline
- 01
November: clean the vendor list
Export payments, merge duplicates, tag card payments and flag eligible vendors. Request missing W-9s now, while vendors are still responsive.
- 02
Early December: chase the gaps
Follow up on missing or outdated W-9s. Note anyone who refuses, and talk to your CPA about backup withholding before your next payment to them.
- 03
Mid-December: settle the edge cases
Review attorneys, rent, foreign contractors and anyone close to the $2,000 line with your CPA, so January is about processing rather than decisions.
- 04
Early January: close December
Record every December payment and reconcile your bank and card accounts so year-end vendor totals are final before anyone prepares a form.
- 05
By February 1, 2027: furnish and file
January 31, 2027 falls on a Sunday, so Forms 1099-NEC are due to recipients and the IRS on Monday, February 1. If you file 10 or more information returns in total, counting all form types, you must file electronically. The IRS IRIS portal is free.
What to hand your CPA
Whoever prepares and files your 1099s will move faster with a tidy package. By mid-January, aim to hand over:
- A vendor list with each vendor's legal name, TIN status, tax classification and 1099 eligibility
- Year-end payment totals per vendor, split by form and box, with card and processor payments excluded
- Copies of, or a secure link to, every W-9 and W-8BEN on file
- A short list of open questions: vendors near the threshold, unclear classifications and anyone who refused a W-9
Year-round tracking is what keeps January calm. Every Finendra bookkeeping plan includes 1099 vendor tracking and tax-ready workpapers, so 1099 season becomes a review rather than a rebuild. You can compare what each tier covers on our pricing page.
Frequently asked questions
- Do I need to send a 1099 to an LLC?
- It depends on how the LLC is taxed. An LLC taxed as a sole proprietorship or partnership generally gets a 1099 once you pay it $2,000 or more for services in 2026. An LLC taxed as a C or S corporation generally doesn't, unless the payment is for legal or medical and health care services. The vendor's W-9 tells you which applies.
- Do I issue a 1099 for payments made by credit card?
- No. Payments made by credit card, debit card or through a third-party payment network are reported by the processor on Form 1099-K, so leave them out of your 1099-NEC and 1099-MISC totals.
- What happens if a contractor won't give me a W-9?
- Keep a record of every request. If a payee doesn't furnish a TIN, you're generally required to backup withhold 24% from reportable payments and deposit it with the IRS. Most contractors send the form once they know this.
- When are 1099s for 2026 payments due?
- Forms 1099-NEC are due to both recipients and the IRS by January 31. Because January 31, 2027 is a Sunday, the deadline moves to Monday, February 1, 2027. Most Form 1099-MISC copies are due to recipients on the same date, while the IRS deadline for filing Form 1099-MISC is later: the end of February on paper or March 31 if you file electronically.
