What are 1099s, Who Gets Them, & More

Written By Nichole Hairfield

As a small business owner, you have a lot to deal with at year-end. Unfortunately, that includes taxes and 1099 filings.

What is a 1099 form?

  • A 1099-Misc Form reports income for a self-employed person or independent contractor

Who gets one?

  • Any vendors/sub-contractors to whom you have paid at least $600 in rents, services, prizes or other income payments (this includes individuals, partnerships, and LLCs)

  • Employees who receive W-2s do NOT receive 1099s.

What are the most common exceptions?

  • Vendors operating as S or C- corporations do not receive 1099s

  • LLCs and partnerships if they are taxed as an S or C-Corp (will need W-9 to confirm)

  • Payments made by credit card, debit card, gift card or third-party payment processor like Paypal.

  • Payments for merchandise, telegrams, telephone, freight, storage, and similar items.

The most important thing to remember is if the proper steps are taken throughout the year, it can help alleviate the headache and stress at year-end. Anytime arrangements are made with a new vendor, you should always request a W-9 before making the first payment. Keep a record of vendors, contact info and W-9s so this information is readily available when 1099 prep starts.


Nichole Hairfield