US Small Business Vendor Payment & 1099 Information Manager
What is Form 1099-NEC?
Form 1099-NEC, Nonemployee Compensation, is an IRS information return used to report payments of $600 or more made in the course of your trade or business to a person who is not your employee. This is typically for services performed by independent contractors, freelancers, or other vendors.
You file Form 1099-NEC with the IRS and furnish a copy to the recipient. You may also need to file Form 1096, Annual Summary and Transmittal of U.S. Information Returns, with the IRS.
Who Receives a 1099-NEC?
Generally, you must issue a Form 1099-NEC if you meet all four of these conditions:
- You made the payment to someone who is not your employee.
- You made the payment for services in the course of your trade or business.
- You made the payment to an individual, partnership, estate, or (in some cases) a corporation.
- You paid the person at least $600 during the year.
Common Examples:
- Paying a freelance graphic designer.
- Paying an independent marketing consultant.
- Paying a contract web developer.
- Paying for services from an attorney (though reported on 1099-NEC or 1099-MISC depending on the type of payment and year).
Who is Typically Exempt from Receiving a 1099-NEC?
While there are exceptions, you generally do NOT need to issue a 1099-NEC for payments to:
- C-Corporations or S-Corporations (with some exceptions, e.g., attorneys).
- Payments for merchandise, freight, storage, or similar items (these may require other 1099 forms if applicable).
- Rent paid to a real estate agent.
- Payments to tax-exempt organizations.
- Payments to employees (these are reported on Form W-2).
- Business credit card payments (the payment processor reports these).
Gathering Information: Form W-9
Before paying a vendor, you should request that they complete Form W-9, Request for Taxpayer Identification Number and Certification. This form provides you with their name, address, and Taxpayer Identification Number (TIN - usually an SSN or EIN), as well as their business entity type, which is crucial for determining if a 1099 is required.
You should have a completed Form W-9 on file for every non-corporate vendor you pay $600 or more to, or might pay $600 or more to.
This tool helps you manage the information for 1099 reporting but does not replace your obligation to understand and comply with IRS rules. Consult IRS Publication 334 or 527 for complete guidance.
Add and manage your vendor information. This data is saved in your browser (using Local Storage).
Obtain this from the vendor using Form W-9. Enter format with dashes.
This is critical for determining if a 1099-NEC is required.
Record payments made to your vendors. This data is saved in your browser (using Local Storage).
Select a vendor you have already added in the "Manage Vendors" tab.
Select the type of payment made. "Services" is the primary type for 1099-NEC.
Generate a summary of payments made to identify potential 1099-NEC recipients for a specific tax year.
Enter the tax year (e.g., 2025 for payments made in 2025, due early 2026).
This tool is for managing information and identifying potential 1099 recipients based on payments for Services. It does not generate official 1099 forms or ensure compliance with all IRS and state regulations. Consult IRS instructions and a tax professional for guidance on proper 1099 filing.