January is crunch time for finance teams. You’re closing the books, cleaning up accounts, and suddenly, it’s time to tackle tax forms. For companies that work with freelancers, vendors, or contractors, 1099 preparation often feels like a last-minute fire drill.
However, the process is much simpler when it starts early and includes the right tools and the right help.
This guide walks you through how to prep smarter, not harder. Whether you’re filing a few forms or several hundred, a little planning, combined with modern 1099 filing services, can save hours of stress and reduce costly mistakes. You’ll avoid penalties, stay compliant, and free your team up to focus on everything else that needs attention this time of year.
Understanding Your 1099 Filing Requirements
Let’s start simple: Who gets a 1099?
If you paid someone outside your payroll, such as freelancers, attorneys, or vendors, and the total reached $600 or more, a form is likely required.
You’ll typically use one of two types. 1099-NEC forms cover contractor payments and must be sent to both the IRS and the recipient by January 31. 1099-MISC applies to things like rent or prizes. While the recipient still gets theirs by January 31, you have until March 31 to file 1099 electronically with the IRS.
As of this filing season, the 10-form rule is in full effect. If you’re sending 10 or more total information returns, which include W-2s and other 1099 types, you are now required to e-file 1099 forms. That’s not optional anymore.
If you miss a deadline or submit inaccurate information, expect penalties. They start at $60 per return if fixed quickly. If you miss the correction window, that number increases. In the worst case, what the IRS calls “intentional disregard,” you’re looking at $680 per return, with no cap.
The Core Steps of Streamlined 1099 Preparation
1. Gather and Verify Payee Information Now
The easiest way to avoid filing chaos is to make sure you have clean, complete data for every payee before January rolls around.
Begin by obtaining a current W-9 form for each person or business you have paid. That form includes their legal name, tax classification, address, and Taxpayer Identification Number (TIN). If the TIN is incorrect or missing, the IRS will flag it, and penalties can begin to accumulate.
To avoid that, take this quick but critical step: run a TIN Match through the IRS. It compares your payee’s name and TIN to government records and alerts you if anything’s off. Fixing it now is easier than after it has been submitted.
If a contractor refuses to provide a TIN, you’re legally obligated to initiate backup withholding, which involves holding 24% of future payments until the issue is resolved. Most businesses prefer not to go there. That’s why it pays to confirm early.
2. Reconcile Payments for Accuracy
Once you know who needs a form, confirm how much they were paid.
Pull totals from your accounting software, vendor systems, and bank records, then cross-check those numbers against your internal logs. Make sure everything lines up.
Why go to the trouble?
Because the IRS isn’t just reviewing your forms. They compare what you submit against what the recipient reports. If something doesn’t match, someone gets a letter, and it might be you.
This step also helps flag unusual items. For example, some payments processed through credit card systems or third-party apps shouldn’t appear on 1099-NEC at all. Those are usually reported by the payment processor on a 1099-K.
3. Choose Your Filing Method: Manual vs. Electronic
You have two ways to file. One involves printing, stuffing, mailing, and praying. The other uses automation, digital submission, and near-instant confirmation.
Manual filing is still possible, but it’s slower, riskier, and rarely worth the effort, especially now that the IRS has tightened the rules. If you’re handling more than nine forms, it’s no longer allowed.
By contrast, when you file 1099 electronically, your forms go through the IRS’s new IRIS system. It replaced the older FIRE system and is now the standard for digital submissions. It checks for formatting issues, accepts uploads directly, and confirms delivery fast.
You can even send forms digitally to recipients with their consent. That part’s important. The IRS requires specific wording, a disclosure process, and opt-out options if you plan to skip physical mail.
The takeaway is that filing manually may check the box, but e-file 1099 solutions make it cleaner, faster, and safer.
The Strategic Advantage of 1099 Preparation Outsourcing
At some point, it makes sense to ask: Should we be handling this ourselves at all?
For a growing number of businesses, the answer is no. You need 1099 outsourcing.
A reliable 1099 service provider handles the hard parts for you without losing control. They process your payment data, validate TINs, ensure forms are formatted correctly, and submit everything through official IRS channels. If a form is rejected, they fix it. If a recipient needs a mailed copy, they print and send it, including the correct disclosures.
Beyond convenience, there’s risk reduction. Filing hundreds (or even dozens) of 1099s manually is time-consuming and error-prone. Outsourcing simplifies the process into a straightforward upload and review. You stay in the loop without being overwhelmed by it.
It also helps future-proof your team. The IRS is phasing out legacy systems, tightening deadlines, and enforcing digital rules more strictly every year. Having a partner who tracks those changes and adapts to them is worth its weight in peace of mind.
Let Us Simplify Your 1099 Filing This Year
You don’t have to dread filing season. With the right steps and the right partner, 1099 preparation can turn from a scramble into a routine task.
The essentials are simple:
- Collect complete W-9s early and confirm every TIN
- Double-check your payment records for accuracy
- Instead of managing it all internally, consider outsourcing to a trusted team
At CheckIssuing, we handle the behind-the-scenes work, such as validating data, running TIN matches, formatting forms, and submitting them securely through IRS channels. If something is off, we catch it. If something’s missing, we help you fix it before it becomes a problem.
Whether you’re filing for a handful of contractors or hundreds of vendors, we’ll make sure it gets done right. Reach out today, or set up an appointment, and let’s take one big task off your year-end list.
Key Takeaways
- Start early: Collect updated W-9 forms and confirm Taxpayer Identification Numbers (TINs) before January.
- E-file requirement: Businesses filing 10+ information returns must e-file through the IRS IRIS system.
- Reconcile payments: Cross-check internal records with accounting data to prevent mismatched 1099s.
- Use TIN Matching: The IRS TIN Match system helps prevent rejections and backup withholding.
- Avoid penalties: Late or incorrect filings can cost up to $680 per return.
- Outsource 1099 prep: Professional filing services handle validation, formatting, mailing, and corrections.
- Future-proof your process: IRS systems are evolving; automation ensures compliance and efficiency.
Footnotes / Citations
- IRS Publication 1220 — Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically
- IRS Instructions for Form 1099-G and General Instructions for 1099 Filers
- IRS TIN Matching Program — Taxpayer Identification Number Verification
- IRS Publication 1281 — Backup Withholding for Missing and Incorrect Name/TIN(s)