If Form 1099 season makes your eye twitch a little, you’re not alone. For many business owners, it’s that annual reminder that paying people is easy, while reporting paying people is harder. The good news? The rules are clearer than they used to be. The bad news? They’re also stricter, more electronic, and changing again soon.

 

Let’s walk through what actually matters for the 2025 tax year (filed in 2026), what the IRS expects when it comes to e-filing, and what’s coming down the road for Forms 1099 so you’re not caught flat-footed.

 

Who has to file Forms 1099?

 

If you’re running a business and you paid someone during the year for services, rent, interest, dividends, or other reportable payments, you’re generally in Form 1099 territory. This applies whether you’re a sole proprietor, partnership, LLC, or corporation making payments as part of your trade or business.

 

A common myth is that corporations are always exempt. While many payments to corporations don’t require reporting, there are important exceptions, such as medical payments and attorney fees that trip people up most often. Bottom line: if money left your business account, it’s worth asking whether it needs a 1099.

 

The e-filing rule that changed everything

 

Here’s the big shift that caught a lot of businesses off guard:

 

If you are required to file 10 or more information returns total, you must e-file. This isn’t 10 Forms 1099-NEC or 10 of one type, it’s everything combined. W-2s, 1099s, 1095s, 1042-S…etc.

 

This rule applies to all information returns required to be filed on or after January 1, 2024, which means it’s fully in effect for the 2025 tax year filings due in 2026.

 

If you’re required to e-file and don’t without an approved waiver, you can be penalized.

If e-filing truly creates a hardship, you can request a waiver by filing Form 8508, but it has to be submitted at least 45 days before the filing deadline.

 

Filing systems: FIRE vs. IRIS (and the clock is ticking)

 

For 2026 filings (reporting 2025 payments), most businesses will still use the FIRE system to e-file Forms 1099. That system requires a Transmitter Control Code (TCC), which takes time to obtain if you don’t already have one.

 

But here’s the forward-looking part: the IRS is transitioning to a newer platform called IRIS (Information Returns Intake System). IRIS is already available, and starting with the 2026 tax year (filed in 2027), it will become the only system for most information returns. The FIRE system will be retired after the 2025 tax year.

 

If you’re still clinging to old processes, now’s the time to modernize before the IRS forces your hand.

 

Reporting thresholds: what counts as “enough” to file?

 

For payments made in 2025 (filed in 2026), the familiar rule still applies: most 1099-MISC and 1099-NEC payments are reported once they hit $600.

 

Starting with payments made in 2026 (filed in 2027), that minimum threshold will jump to $2,000, with inflation adjustments beginning the following year. This change will reduce some low-dollar reporting, but not yet. Don’t apply this rule early or you’ll underreport.

 

One area moving in the opposite direction is Form 1099-K. For third-party settlement organizations, the reporting threshold is more than $2,500 for 2025, but will be lowered, and hat’s intentional. Yes, it will affect more people.

 

New forms you may start seeing

 

There’s Form 1099-DA for digital asset broker transactions, Form 1098-VLI for vehicle loan interest reporting, and Form 1099-S will start including digital asset reporting for real estate transactions beginning in 2026. Even if you’re not directly involved in these areas, they’re a signal of where IRS reporting is headed: more data, more detail, less wiggle room.

 

Due dates that actually matter (mark these)

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For the 2025 tax year, here’s how the calendar shakes out:

 

Recipient copies for most Forms 1099 are due February 2, 2026. Some specialized forms, like 1099-B, 1099-DA, 1099-S, and certain boxes on 1099-MISC, are due February 17, 2026.

 

For the IRS, Form 1099-NEC has an earlier deadline than other forms: February 2, 2026, whether you file on paper or electronically. Other 1099 forms are due March 2, 2026 if filing on paper, or March 31, 2026 if e-filing.

 

Extensions, corrections, and penalties (the safety net section)

 

If you need more time to file with the IRS, Form 8809 can give you an automatic 30-day extension for most forms. Forms W-2 and 1099-NEC are pickier and require a non-automatic request.

 

Need more time to furnish statements to recipients? That’s Form 15397, and it must be submitted by the original due date.

 

Mistakes happen. If you catch one, fix it as soon as possible. Most errors require filing a corrected return. Name or TIN errors require a two-step correction process.

 

Penalties range from $60 to $340 per return, depending on how late the correction is, with higher penalties for intentional disregard. There is a small safe harbor for minor dollar errors, but don’t count on it as a strategy.

 

The takeaway for business owners

 

Form 1099 compliance is no longer a back-office afterthought. The IRS has made it clear: fewer paper filings, more electronic reporting, tighter deadlines, and broader visibility into payments.