2025 1099 Filing Deadlines and IRS Changes Every Small Business Should Know 

As 2025 winds down, small business owners should already be thinking about 1099s. These IRS information returns are a critical part of year-end compliance, and this year brings important updates you can’t afford to miss. 

From new reporting thresholds to upcoming deadline changes, understanding your 1099 obligations now will save you stress (and potential penalties) when tax season arrives. 

What Are 1099s and Why Do Small Businesses Need Them? 

A 1099 is an IRS form used to report payments made to non-employees and certain vendors. While employees receive W-2s, contractors and other service providers often receive 1099s. 

The most common forms include: 

• 1099-NEC – reports nonemployee compensation (like independent contractors). 
• 1099-MISC – reports rents, royalties, prizes, and other miscellaneous income. 
• 1099-K – reports payments processed through third-party networks like PayPal, Venmo, or Etsy. 

Important note about corporations and LLCs: 

• Generally, you do not need to issue 1099s to corporations. 
• Exception: attorneys must receive a 1099 if you pay them $600 or more in annual fees, no matter their entity type. 
• LLCs can be taxed as a sole proprietorship, partnership, or corporation. That’s why collecting a completed W-9 form is essential – it tells you how the LLC is taxed and whether a 1099 is required. 
• Many business owners assume “LLC” automatically means “corporation,” but that’s not always the case. Always verify before deciding not to issue a 1099. 

For small businesses, issuing accurate 1099s is more than just a requirement – it protects your tax deductions and helps you avoid IRS scrutiny. 

Key IRS 1099 Changes for 2025 

Several recent law changes will affect 1099 reporting: 

• 1099-NEC and 1099-MISC thresholds will rise from $600 to $2,000. 
  When it takes effect: Payments made in 2026 and later. For 2025, the $600 threshold still applies. 
• 1099-K threshold is back to $20,000 and 200 transactions. 
  If you receive payments through PayPal, Venmo, or platforms like Etsy, you’ll only get a 1099-K if both thresholds are met in 2025. 
• Lower e-filing threshold. 
  If your business files 10 or more information returns of any kind, you must file electronically. 
• IRS box and code updates. 
  Each year, the IRS makes small changes to form boxes, instructions, or income categories – double-check the 2025 forms before filing. 

2025 1099 Filing Deadlines – Our Internal Timeline 

While the IRS sets official deadlines, at Gift CPAs, we set earlier internal deadlines to ensure everything is filed accurately and on time. 

• All 1099 information must be submitted to us by January 24, 2026. 
  This allows us to review W-9s, confirm payment details, prepare recipient copies, and complete the electronic filing process. 

Even though the IRS accepts certain 1099s through February or March, we file all forms by January 31 to keep everything consistent and avoid last-minute corrections. 

Bottom line: if we don’t receive your complete information by January 24, we can’t guarantee timely filing. 

Penalties for Missing 1099 Deadlines 

Missing or incorrect 1099s can quickly get expensive: 

• Late filing penalties range from $60 to $310 per form, depending on how late they are. 
• Incorrect or missing information can bring additional penalties. 
• IRS audits become more likely if reported income doesn’t match between payers and recipients. 

For small businesses, even a few missed forms can add up to thousands of dollars in fines. 

Common Small Business 1099 Mistakes 

Here are pitfalls we see most often: 

• Not collecting W-9s from contractors before paying them. 
• Mixing up 1099-NEC, 1099-MISC, and 1099-K. 
• Filing on paper when electronic filing is required. 
• Waiting until January to chase down contractor details. 

How to Prepare for 1099 Filing Now 

The best way to avoid stress is to prepare early. Here’s a quick checklist: 

• Collect or update W-9 forms from all vendors and contractors. 
• Track payments made during 2025 – including those through payment platforms. 
• Verify which forms apply to which vendors. 
• Plan for electronic filing if you have 10 or more forms. 
• Submit all 1099 details to Gift CPAs by January 24, 2026. 

The Importance of the Client Portal & Year-End Communication 

Our secure client portal is the fastest, safest way to provide us with your 1099 information. Setting up your portal access before year-end ensures you can: 

• Upload W-9s and vendor details quickly. 
• Communicate securely with our team if updates are needed. 
• Review information we’ve collected and confirm its accuracy. 
• Avoid delays and last-minute paperwork in January. 

Tip: If you haven’t yet set up your portal or need help logging in, contact us now so we can get you connected before things get busy. 

1099 Filing FAQs 

Do small businesses need to file 1099s in 2025? 
Yes. If you paid $600 or more to a contractor in 2025, you must issue a 1099-NEC (until the new $2,000 threshold takes effect in 2026). 

Do corporations receive 1099s? 
Generally no, except for attorneys, who must always receive one if you paid $600 or more. 

Why is a W-9 so important? 
Because it tells you how a vendor/LLC is taxed, which determines if they need a 1099. 

What happens if I don’t issue a 1099? 
You may face IRS penalties and risk having deductions disallowed. 

Get Help with 1099 Filing and IRS Compliance 

Getting 1099s right is crucial to staying compliant and avoiding penalties. At Gift CPAs, we work with small businesses every year to simplify the process – from collecting W-9s to preparing and filing 1099s accurately and on time. 

Don’t wait until January.

At Gift CPAs, we’re committed to helping small business owners across Central PA stay compliant, save time, and reduce stress during tax season and beyond. With our fixed-fee model, you’ll never face hidden costs or surprise bills — just straightforward, expert guidance designed to fit your business needs. From accurate recordkeeping and W-9 collection to year-end compliance and ongoing financial management, we provide clarity and consistency so you can focus on running your business with confidence.

Set up your portal now, communicate updates before year-end, and submit your records by January 24, 2026. Contact Gift CPAs today to prepare for a stress-free tax season.