The first tax deadline of the year comes on January 31st for 1099 forms. This date tends to sneak up on business owners year after year due to its proximity to the holidays, and because most businesses have yet to close their books from the previous year in December. If this sounds familiar, you’re not alone. However, it is important to strategically plan for how your business will handle 1099s to avoid consequences. Here’s what you need to know from a small business accountant.
Missing or incorrect 1099s aren’t just a paperwork headache—they can result in significant penalties. The IRS has increased its focus on 1099 reporting, with fines ranging from $60 to $330 per form for late filing in 2025, plus additional penalties for intentional disregard and inaccuracies. But there’s good news: you can make this process painless with the right approach and technology.
1. Waiting Until the Last Minute
Many business owners scramble to gather contractor information in January, making an already stressful time worse. The solution? Start collecting W-9s before you make your first payment to any contractor.
2. Relying Solely on QuickBooks
While QuickBooks offers basic 1099 functionality, it’s not always the most efficient solution. Consider supplemental tools like Keeper Tax, which can help automate the process and ensure accuracy.
3. Missing Filing Requirements
Many businesses don’t know who needs a 1099, which can add to the stress. If you’re unsure, the general rule of thumb is any contractors or outside counsel paid more than $600 in the calendar year—unless they’re a corporation.
If you haven’t started your 1099 process yet, don’t panic. Here’s your action plan:
Start the new year right by implementing these practices:
Don’t let 1099 stress overshadow your 2025 business goals. Whether you need help with this year’s filing or want to set up a better system for the future, we’re here to help. Our team can review your contractor payments, ensure compliance, and help implement systems to make next year’s filing a breeze. Remember: The best time to improve your 1099 process was last year. The second best time is now.
Ready to make 1099 filing stress a thing of the past? Contact us at grow@cultivateconsulting.co to learn how we can help streamline your contractor payment tracking and reporting.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
