W-9 & 1099 Compliance

 Collecting W-9s throughout the year is one of the simplest ways to make 1099 season easier. Starting with payments made on or after January 1, 2026, the federal reporting threshold increases from $600 to $2,000 per vendor. Even with the higher threshold, we recommend requesting a completed W-9 from every service vendor before making payment. It's impossible to know at the beginning of the year which vendors will exceed the reporting threshold, and collecting the information up front eliminates last-minute scrambling. 

 Businesses are responsible for collecting W-9 information from applicable vendors, maintaining accurate records, and issuing required Forms 1099-NEC or 1099-MISC. These requirements apply to businesses of all sizes and ultimately remain the responsibility of the business owner. Having accurate vendor information on file helps ensure your year-end reporting is complete and compliant.  

 The easiest way to stay compliant is to make W-9 collection part of every new vendor relationship. Before issuing a vendor's first payment, request a completed W-9, verify it is complete and signed, and save it with your records. Once those steps are complete, payment can be released. A simple onboarding process like this prevents most 1099 issues before they ever happen.  

 Occasionally a vendor may delay or refuse to provide a W-9. When that happens, send a written request, keep a copy for your records, and explain that the information is required for IRS reporting. If the vendor continues to refuse, IRS rules may require backup withholding, or you may choose not to continue working with that vendor. Regardless of the vendor's decision, the reporting obligation remains with the business.  

 Missing W-9s can delay 1099 preparation and may expose your business to IRS penalties if required filings cannot be completed accurately. Although we provide a missing W-9 list as a courtesy during 1099 season, obtaining the required documentation is ultimately the responsibility of the business owner. A few minutes spent collecting paperwork today can save hours of work at year-end.  

 Collecting W-9s is a standard part of doing business and should be a routine step whenever you begin working with a new vendor. If you'd like help creating a vendor onboarding checklist, standard W-9 request, or simple process to keep your records organized throughout the year, we're happy to help. The goal is simple: make next January as smooth and stress-free as possible.