The January Scramble: W-9s, 1099s, and Who Actually Needs One
Let’s talk about 1099s for a minute.
I know. Not exactly a fun topic. But stick with me, because if you’ve ever paid someone to help with your business, this one’s for you.
Here’s what usually happens. It’s January, and somebody mentions 1099s are due at the end of the month. Then comes the panic. You’re scrolling through a whole year of payments trying to remember who you paid and for what, and texting people asking for a W-9 they’ve never heard of. Maybe they send it, maybe they don’t. Either way, the clock is ticking.
Wait, I’m supposed to be sending people forms?
Yep. And if this is news to you, you’re definitely not alone.
Someone I know well had no idea either. They’d been paying people for their work, weren’t tracking any of it, never collected a single W-9, and some of those people had been paid enough to need a 1099. They found out because I happened to bring it up. And honestly, how would they have known? Nobody hands you a rulebook when you start a business.
Ok, so what am I actually supposed to be doing?
That’s what we’re going to walk through together. What these forms are, who needs one, and how to make sure January doesn’t sneak up on you next year.
Ok, first things first. What even is a W-9?
A W-9 is a one-page form you ask someone to fill out before you pay them. It has their name, their tax ID number (either their Social Security number or their business’s EIN, which is basically a Social Security number for a business), and what kind of business they are.
And here’s the part that trips people up: you don’t send it anywhere. You just keep it. It’s for your records, so you have everything you need later.
And a 1099?
Ever had a regular job and gotten a W-2 at tax time? A 1099 is kind of like that, but for people who aren’t your employees. It’s the form you send out after the year is over that says “hey, here’s how much I paid you this year.” One copy goes to the person you paid, and one goes to the IRS.
Why does the IRS care what I paid someone?
Because the person you paid is supposed to report that money as income on their taxes. Your 1099 is how the IRS double-checks that the numbers match up.
So how do they connect?
Think of it like this. The W-9 is the info you collect at the start. The 1099 is the form you fill out at the end, using that info. No W-9, no easy way to do the 1099. Which is exactly why January gets so messy for so many people.
Ok, so who actually needs a 1099 from me?
Starting in 2026, it’s anyone you paid $2,000 or more during the year for services they did for your business. That’s the total for the whole year, not per payment. So if you paid your photographer $500 four different times, that’s $2,000, and they need one.
(If you’ve heard $600, that was the old number. It went up to $2,000 for 2026.)
Services? What counts as a service?
Work someone does for you. Your second shooter, your web designer, your VA, the person who edits your videos. If you’re buying stuff, like supplies or materials from another maker, that doesn’t count. 1099s are for paying people to do things, not for buying things.
Do I send one to everyone who does work for me?
Not quite. Generally, corporations don’t get one. People and most LLCs do.
How am I supposed to know what kind of business someone has?
You don’t have to guess. That’s the W-9’s job. There’s a box on it where they check what kind of business they are. If they checked that they’re a corporation (or an LLC that’s taxed like one), you usually don’t need to send a 1099. Anything else, you probably do.
One weird exception: lawyers. If you paid an attorney for their services, they get a 1099 no matter how their business is set up.
What if I paid them with a credit card or PayPal?
Good news. If you paid with a credit or debit card, or through PayPal’s “goods and services” option, the payment company handles the reporting for you. No 1099 needed from you.
But if you paid with cash, a check, Zelle, a bank transfer, or PayPal “friends and family,” that’s on you.
What about my studio rent?
Oh, good question. Rent can need a 1099 too, just a different version called a 1099-MISC. Same $2,000 rule. Whether yours needs one depends on who you’re paying and how their business is set up. The easy move? Ask your landlord for a W-9 too, and run it by your tax preparer.
What if they’re more like an employee?
That’s a whole different conversation. If someone works set hours, does things your way, and works mostly for you, they might actually count as an employee. Worth a chat with your tax preparer before you treat them like a contractor.
Ok, give me the short version.
You probably need to send a 1099 if:
You paid a person or an LLC
For work they did for your business
$2,000 or more total in 2026
With cash, check, Zelle, or bank transfer
Ok, so what’s the one thing I should actually do?
Get a W-9 before you pay anyone. Not after the job. Not in January. Before the first payment goes out.
Even if I’m only paying them a little?
Yep. You might hire someone for one small project and then end up working with them all year. By the time you realize they’ve crossed $2,000, it’s December and you’re back in scramble mode. Asking everyone up front means you never have to figure out who needs one later. You’ll already have it.
What if they won’t give me one?
Most people will. Usually they just haven’t gotten to it yet, so a friendly nudge does the trick. That’s also why asking before the work even starts makes life so much easier. If someone still isn’t sending it, keep a record of when you asked (an email works great), and loop in your tax preparer so they can help you figure out next steps.
Isn’t it kind of awkward to ask?
It can feel that way, but it’s totally normal. Anyone who works with businesses has filled out a W-9 before. You can keep it simple:
“Before I send your first payment, can you fill out this W-9 for my records? Thanks!”
Then just attach the form or link to it on the IRS website. Even easier, make it part of how you bring someone on. Contract, W-9, then payment. Every time.
Ok, I’ve got the W-9. Now what?
Now you just keep track of what you pay them. That’s it. The goal is that when January shows up, you already know exactly who needs a 1099 and how much to put on it.
How do I keep track without making it a whole thing?
Two simple pieces:
A Contractors folder. Make one folder in Google Drive, Dropbox, or wherever you keep business stuff. Every W-9 goes in there the moment you get it. Later, copies of the 1099s you send go in there too. One spot, no digging.
A way to track payments. If you use bookkeeping software like Zoho Books or QuickBooks, there’s usually a setting to mark someone as a 1099 contractor. Turn that on when you add them, and the software keeps a running total for you. If you’re not using software yet, a simple spreadsheet works too. Name, date, amount, and how you paid them.
Why does it matter how I paid them?
Remember, card and PayPal “goods and services” payments don’t count toward your 1099s. So if you paid someone $1,500 by check and $1,000 by credit card, only the $1,500 goes on your 1099. That means no 1099 at all in that case. Tracking how you paid keeps the numbers right.
Do I need to check on it during the year?
A quick peek every few months is plenty. And if you have a bookkeeper, this should already be part of what they’re watching for you.
Ok, it’s January. How do I actually send these things?
This is the easy part if you’ve been tracking all year. You’ve got the W-9s, you’ve got the totals. Now it’s just filling in the form.
When are they due?
January 31. If that lands on a weekend, it moves to the next business day. Both copies are due that day: the one for the person you paid, and the one for the IRS.
Where do I even get the form?
You’ve got a few options:
The IRS’s free filing site. The IRS has its own free website for filing 1099s online, called IRIS. If you’re curious, their page walks through how it works and how to sign up.
A filing service. Something like Avalara 1099 & W-9 (it used to be called Track1099) will file for you and send out copies for a small fee per form. Some bookkeeping software can do this too.
Your bookkeeper or tax preparer. If you have one, ask. A lot of them handle this.
Can’t I just print one off the IRS website?
Kind of, but not really. The IRS copy has to be on a special form you order from them, and you can’t just print it at home. Honestly, filing online is way easier.
What if I mess one up?
It happens. You can send a corrected one. Not the end of the world, just fix it as soon as you notice.
Anything else?
Save a copy of every 1099 you send in your Contractors folder. Done. Seriously, that’s it.
Ok, real talk. What happens if I miss one?
The IRS charges a penalty for each 1099 that’s late or never sent. As of 2026, it ranges from $60 to $340 per form, depending on how late it is. The faster it gets fixed, the smaller the penalty.
Per form?
Yep. And here’s the sneaky part: remember how each 1099 has two copies, one for the person you paid and one for the IRS? Each one can come with its own penalty. So one missed 1099 can really be two.
Ok, that’s kind of terrifying.
I know. But here’s the thing. This isn’t about scaring you. If you made a mistake or missed one, file it as soon as you realize it. Late is still way better than never.
And honestly? If you get the W-9 before you pay, keep everything in one folder, and peek at your totals every few months, you’re going to be just fine.
Ok, this is a lot. Can you just give me the cheat sheet?
Absolutely. If you remember nothing else, remember these three things:
W-9 first, payment second. Every time, from everyone. It saves you from the January scramble.
Keep it all in one place. A Contractors folder for the paperwork, and your bookkeeping software (or a simple spreadsheet) for the payments.
January 31 is the day. Both copies, out the door. If it’s a weekend, you get until the next business day.
That’s it. You’ve got this.
Want the grab-and-go version? Grab The Contractor Checklist here and keep it handy for the next time you bring someone on.
P.S. If you’d rather not keep track of all this yourself, let’s talk. I can keep your income and expenses organized all year, so your numbers are ready when tax time comes. Grab a spot on my calendar here.
Fine print: The numbers and rules in this post are current as of 2026 and can change from year to year. State rules may also be different. Always double-check with the IRS website or your tax preparer. This post is for educational purposes only and isn’t tax, legal, or accounting advice.
