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Avoid the "Information Return" Headache: Your 2026 1099 Guide




A Form 1099 is an IRS information return used to report income paid outside of the traditional employer–employee relationship. The IRS relies on 1099s to match income reported by payers with income reported on recipients’ tax returns. When the information doesn’t align, it often leads to IRS notices, processing delays, or penalties.


For business owners, rental property owners, and anyone paying non-employees, understanding and handling 1099s correctly is an important part of staying compliant and avoiding unnecessary issues during tax season.


Who Is Required to File 1099s?

1099 filing requirements generally apply to payments made in the course of a trade or business.


You are typically required to file a 1099 if you:

  • Operate a business or rental activity

  • Paid $600 or more to a non-employee for services or certain qualifying payments

  • Made payments by cash, check, or ACH


1099s are generally not required for:

  • Personal, non-business payments

  • Payments to employees (reported on W-2s instead)

  • Payments made by credit card or third-party processors, which are usually reported by the platform


When Are 1099s Filed?

For this tax year, the deadline to issue 1099s to recipients and file them with the IRS is February 2, since January 31 falls on a weekend.

Filing late—or filing with missing or incorrect information—can result in penalties assessed per form, even if the income itself is properly reported.


What If You Receive a 1099?

If you receive a 1099, the IRS also receives a copy. That does not mean the entire amount is automatically taxable. These forms typically report gross income, and applicable expenses or exclusions may still apply.


If you receive a 1099, you should:

  • Review the payer’s name and tax ID for accuracy

  • Confirm the amount reported matches your records

  • Determine the correct tax treatment, including applicable deductions

  • Report the income on your tax return, even if it is later offset

  • Request a corrected 1099 promptly if any information is incorrect


Taking these steps early helps prevent IRS matching notices later.


Quick 1099 Filing Checklist for filing

  • Identify contractors or vendors paid $600+ for business or rental services

  • Verify W-9 information (legal name, EIN/SSN, address)

  • Reconcile payment totals with your records

  • Issue and file 1099s by February 2


Final Thoughts

1099 reporting plays an important role in the IRS’s income-matching system. When issued and reported correctly, it supports accurate tax filings and reduces the likelihood of follow-up correspondence.




If you’re unsure whether you need to issue a 1099—or how to handle

one you’ve received—LightUp Tax can help review your situation and

ensure everything is handled correctly and on time.

Book a free discovery call with our CPA here.






 
 
 

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