If you work with independent contractors, tax season can quickly turn into a scramble. Suddenly, you’re digging through payment records, trying to remember who you paid and how much, and emailing contractors for tax information you should already have. What seemed manageable throughout the year can become a time-consuming headache when filing deadlines are approaching.
For business owners, the pain is familiar: missing W-9s, incomplete contractor information, unclear payment records, and uncertainty about who may need a 1099. Add the pressure of tracking people down in January, and a relatively simple reporting requirement can become another task competing for your attention during an already busy time.
The solution is to get your contractor records in order before year-end. Focus on three things now:
1. Make Sure You Have W-9s on File
Check that you have a completed Form W-9 for each contractor. This form gives you key information you may need for tax reporting, including the contractor’s legal name, taxpayer identification number, and tax classification.
The best practice going forward? Collect a W-9 when you begin working with a contractor—not months later when you need it.
2. Review Your Contractor Payments
Look at how much you’ve paid each contractor so far this year and make sure those payments are recorded and categorized correctly.
There’s also an important change for 2026 to keep in mind. Beginning with payments made in 2026, the reporting threshold for many payments reported on Forms 1099-NEC and 1099-MISC increases from $600 to $2,000. For example, a business generally must issue a Form 1099-NEC when it pays a nonemployee $2,000 or more for services during 2026. The $2,000 threshold will be adjusted for inflation beginning in 2027.
That makes reviewing your year-to-date contractor payments especially important this year. Knowing how much you’ve paid, and having accurate records to back it up, can help you determine which payments may trigger a reporting requirement.
3. Identify Potential 1099 Requirements Early
Not every contractor or payment is necessarily reported the same way. Reporting requirements can depend on factors such as the amount paid, the type of payment, how the payment was made, and the contractor’s tax classification.
Review your contractor list now and flag anything you’re unsure about. That gives you time to ask your tax professional questions before deadlines are looming.
Make January Easier Now
When your W-9s are collected, your payment records are organized, and potential reporting requirements have been reviewed, January looks very different. Instead of chasing contractors and sorting through months of transactions, you can approach 1099 season with the information you need already in place.
A few minutes of preparation now can mean fewer surprises, less administrative work, and a smoother tax season for your business.
