2025 1099 Tax Deadline: Essential Information for Startups

If your startup paid any vendor that’s not a corporation $600 or more, you’ll need to file a 1099 Form with both the IRS and the specific vendor. Simply put, 1099 Forms are used to report payments that usually aren’t from an employer. Such payments are made to vendors and most commonly consist of work with independent contractors.

However, as 1099 Forms are an important part of tax planning and must be filed accordingly with annual income taxes, it’s important to be prepared and hit all the necessary deadlines to stay compliant with the IRS. In this post, we’ll cover everything you need to know about the 1099 Forms – from the types of 1099s your startup is likely to need to key deadlines to filing mistakes you’ll want to be sure to avoid. Read on to learn more or contact Graphite Financial today for more information.

Key 2025 1099 Tax Deadlines

The 1099 Form matters to startups because it ensures that they’re meeting their legal obligations when it comes to reporting payments of over $600 in a given year to freelancers, contractors and other non-employees. Like other tax obligations, failing to file 1099 Forms is likely to result in financial penalties.

Just like W-2 forms, your startup has to meet certain 1099 federal tax deadlines by law or risk falling out of compliance with the IRS. Here are some of the key dates that you want to know:

• January 31, 2025: This is your startup’s deadline to send 1099 Forms to qualifying recipients.
• February 28, 2025: This is the deadline for paper filing with the IRS.
• March 31, 2025: This is the deadline for electronic filing with the IRS.

Remember, late filings or failure to file before these business tax deadlines can result in a penalty.

Types of 1099 Forms Startups May Need

Contrary to what you may think, there’s more than just one type of 1099 Form – and it’s important to know the difference between each of them and what type of form you need to file with the IRS per your situation. Here’s a look at the common types of IRS Forms:

• 1099-NEC: This is the standard form that is filed with non-employees on payments that exceed $600 per year. NEC stands for “non-employee compensation,” and these payments tend to go to contractors and freelancers.
• 1099-MISC: This is a form that is filed for miscellaneous income, rent or royalties. Similar to the NEC Form, it’s used when payments have exceeded $600 for the year.
• 1099-K: This is a form that must be filed for payment settlement entities for transactions, such as credit cards or debit cards. Payment apps and third-party settlement organizations may also qualify.

All these forms help ensure that your startup correctly reports payments and doesn’t misrepresent taxable income. Failing to file the right 1099 Forms can lead to discrepancies that might trigger IRS audits or penalties.

Steps to File 1099 Forms for 2025

So how can you be sure that you’re filing all of your 1099 Forms on time for the 2025 fiscal year? Here’s a look at some steps to implement:

• Make sure you keep proper documentation of contractor and vendor information. This can often be found in W-9 Forms that are filled out and submitted to you by the contractors and vendors you work with.
• Consider using IRS-approved tax software or working with professional accounting tax services (like Graphite) for electronic filing of certain business income tax forms.
• Double and triple-check for any errors so you can minimize your risk of rejections or penalties.

If you’re a startup making regular payments to contractors or vendors, you may also need to make estimated tax payments throughout the year. These are prepayments of your tax liability, which helps avoid large business income tax bills or penalties when you file your return.

Penalties for Missing the 2025 1099 Deadline

If you fail to file 1099 Forms on time or fail to file them at all, you could be on the hook for some significant financial penalties. For instance, you can expect a $50 late fee per form if your filing is more than 30 days late. This could amount to as much as $290 in late fees per form if the 1099 is filed after August 1, 2025.

Your startup may be on the hook for even more severe financial penalties if you disregard filing requirements, especially if it is linked to payroll taxes or other employee-related reporting errors.

Common 1099 Filing Mistakes to Avoid

For those who are inexperienced, it can be difficult to properly file 1099 tax Forms. Some of the biggest mistakes include:

• Incorrect or missing Taxpayer Identification Numbers (TINs) on forms. This underscores the importance of proper documentation of contractor and vendor information.
• Filing the incorrect form based on the payment type. Make sure you know the difference between the 1099-NEC, 1099-MISC and 1099-K.
• Missing recipient copies or failure to file electronically per IRS deadlines.

If your startup fails to file 1099 Forms correctly, it could lead to discrepancies in federal income tax liability. This may result in increased business tax obligations or penalties, so it’s important to file accurately and on time.

How Graphite Can Help with 1099 Tax Filing

As experts in accounting and tax compliance, Graphite is the go-to resource for startups for all things related to their tax obligations. Graphite’s experienced, qualified tax professionals can help track payments and prepare forms to ensure that your startup stays compliant with IRS regulations and files all necessary forms on time. Contact us today to learn more about 1099 Forms and filing requirements, and to schedule a free consultation.

Stay Ahead of the 2025 1099 Deadline

Don’t wait until the last minute to prepare and file your 1099 Forms – your startup’s tax planning efforts should include them already. Missing deadlines is only going to lead to more trouble in the long run, not to mention the possibility of financial penalties. By partnering with experts like Graphite Financial, you can ensure you stay compliant and have all of your ducks in a row when it comes to tax time, offering you the peace of mind to make tax season stress and hassle-free.

Get Expert Help with 2025 1099 Tax Filing

For more information on how Graphite Financial can help you with your 1099 Forms, contact us today to schedule a free consultation. We’ve helped hundreds of startups with their accounting and tax planning needs and are standing by and ready to help yours as well. Contact us today to learn more.

FAQs

Who needs to file a 1099 form?

Startups need to file a 1099 Form if they’ve paid a contractor or vendor more than $600 in a given year. 1099 Forms must also be filed for over $600 in miscellaneous income, rent or royalties and payment settlement entities for transactions, such as credit cards or debit cards. However, payments made to C corporations typically do not require the filing of a 1099 Form, unless the payments are for legal services or certain other specific services that do require reporting.

What is the threshold for 1099-NEC reporting?

Startups must report payments of non-employee compensation totaling $600 or more.

Can I file 1099 forms electronically?

Yes, absolutely. In fact, the IRS often prefers electronic filing. The 2025 tax year e-filing date for 1099 Forms is March 31, 2025. If you’re filing by paper, the deadline is earlier – February 28, 2025.

What happens if a contractor doesn’t provide a W-9?

If a contractor doesn’t provide a W-9, you should rethink doing business with it. If you do business with the contractor and they won’t provide the W-9, you should consider backup withholding. This helps ensure that appropriate taxes are paid to the IRS, regardless of whether the contractor is compliant with the tax reporting regulations and requirements.

Are there any exemptions for small businesses?

Startups may be eligible for certain tax benefits based on the industry they’re in and the market they serve. To understand what benefits your startup may be eligible for and take advantage of everything, consider working with a professional accountant like Graphite.