If you’ve hired contractors, you’re likely facing a hard deadline you can’t move: January 31. By that date, you must have issued 1099-NEC forms to every non-employee contractor who earned $600 or more during the previous calendar year. Miss it, and you’ll owe penalties to the IRS, plus the forms themselves become harder to track down later. The January 31 deadline is one of those unmovable dates that catches business owners by surprise—especially if you’ve been running your business from your phone without a dedicated accounting process. Whether you’ve been paying contractors in cash, through bank transfers, or via payment apps, each payment over $600 across the full year triggers a 1099-NEC you must file. This guide walks you through what the deadline actually means, who’s affected, and how to get it right.
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Does this apply to your business in Florida?
If you paid any non-employee contractor $600 or more in calendar year 2025, you must issue them a 1099-NEC form by January 31, 2026. The Florida Department of Revenue and IRS both expect these forms on file. This rule applies regardless of how you paid them—cash, check, credit card, or app. It also applies to all industries: contractors, consultants, freelancers, cleaning companies, construction workers, and specialists. Even if you’re a small Florida business with revenue under $500K, the 1099-NEC requirement is the same.
Who actually needs to issue 1099-NECs
You must issue a 1099-NEC if you’re a business owner and you paid a non-employee contractor $600 or more during the calendar year. You do not issue a 1099-NEC to employees—they receive a W-2 instead. You do not issue a 1099-NEC to another business entity (a corporation, LLC, or partnership) unless you paid them for legal or professional services and they didn’t give you a completed W-9 form. You do issue a 1099-NEC to sole proprietors, freelancers, and other independent contractors you paid for services.
In Florida, contractors face an additional consideration: sales tax. If you hired a contractor and the work involves materials—say, a cleaning company that brings its own supplies, or a roofer providing shingles as part of the job—that portion of the payment is taxable under Florida law. Labor alone, when separately stated on your invoice, is not subject to sales tax. But when the contract is lump-sum (no breakdown of labor vs. materials), the full amount may be taxable. Itemizing your contractor payments now prevents misreporting later.
The mechanics of January 31: what you have to do
The January 31 deadline has two parts. First, you must provide a copy of the 1099-NEC to the contractor themselves by January 31. Second, you must file a copy with the IRS by the same date (or shortly after if you file electronically; check current IRS guidance for the exact e-file window). You cannot delay this work. There is no grace period, no “close enough” date.
To file a 1099-NEC, you’ll need to gather the contractor’s legal name, current address, tax ID number (their Social Security number or EIN), and the total amount you paid them in the calendar year 2025. If you’ve been tracking payments in a spreadsheet or bank account, pull those records now and sum them by contractor. If a contractor’s total reaches $600 or more, they get a 1099-NEC. If you made multiple payments to the same person throughout the year—$400 in March, $350 in July, $100 in November—that’s $850 total, so you file a form.
You can file the 1099-NEC using IRS Form 1099-NEC directly, or you can use an online filing service or your accounting software if it supports 1099-NEC filing. Some business owners work with their CPA or bookkeeper to file these forms. Others file them directly on the IRS website or use a third-party service. Whichever path you choose, the deadline is the same.
Common mistakes and how to sidestep them
Mistake 1: Not tracking payments across the full year. Contractors paid sporadically—a few hundred here, a few hundred there—can easily slip past the $600 threshold without you noticing. You think you only paid a contractor $400, but when you pull bank records in January, you find $800 in total payments. The fix: consolidate all payments to each contractor before January 31. Use your bank statements and payment app histories as the source of truth, not your memory.
Mistake 2: Using the wrong name or tax ID. If you issue a 1099-NEC with a contractor’s name spelled wrong, or with an incorrect Social Security number or EIN, the IRS can’t match the form to the contractor’s tax return. The contractor may then face their own filing issues or penalties. Before you file, verify the contractor’s legal name and tax ID by asking them directly or checking their W-9 form (which you should have on file anyway). A five-minute call or email prevents a compliance headache.
Mistake 3: Not issuing a copy to the contractor. You must send a copy of the 1099-NEC to the contractor themselves by January 31. Many business owners file with the IRS but forget to send a copy to the contractor. That contractor then won’t have proof of income for their own tax filing. Send it via mail, email, or however you normally communicate with them, but send it.
Mistake 4: Mixing up contractor payments with sales tax liability. In Florida, if you paid a contractor for work that involved materials, that payment may be subject to sales tax that you owe to the state—separately from the 1099-NEC. The 1099-NEC is about income reporting to the IRS. The sales tax is about remittance to Florida. Don’t assume issuing a 1099-NEC settles your sales tax obligations. If you’re unsure whether the contractor’s work is taxable, consult the Florida Department of Revenue guidelines or your CPA.
How to organize for next year
January 31 deadlines are avoidable chaos if you set up a simple system now. Create a contractor register: a spreadsheet or log where you record each contractor’s name, tax ID, and cumulative payments as you pay them throughout the year. Every time you pay a contractor, add to their running total. By December, you’ll know exactly who hit $600 and who didn’t. You won’t be scrambling in January.
Some business owners use their accounting software or a business process outsourcing platform to organize transaction data by contractor and payee. These tools can automatically categorize and summarize payments, so when January arrives, you’re not hunting through months of receipts. Others use a simple spreadsheet and update it monthly. The method doesn’t matter as long as you have a single source of truth come filing season.
If you work with a CPA or bookkeeper, forward them your contractor payment records by early January so they have time to prepare the forms. Don’t wait until January 25 to contact them. Many accountants handle high volumes of 1099-NEC filings in that final week, and delays mean missed deadlines.
Frequently Asked Questions
Do I have to issue a 1099-NEC if I paid a contractor less than $600?
No. The threshold is $600 per calendar year per contractor. If a contractor earned $599 from you, no 1099-NEC is required by law. That said, some business owners issue 1099-NECs to all contractors regardless of amount for their own record-keeping. Check with your CPA on your own practice, but the legal requirement kicks in at $600.
What if a contractor gave me a W-9 but no tax ID number?
A W-9 form should include the contractor’s tax ID (their SSN or EIN). If they didn’t fill it out, you cannot file a 1099-NEC. Contact the contractor and ask them to complete the W-9 with their correct tax ID before you file. You need an accurate tax ID to match the form to the contractor’s tax return with the IRS.
Can I file a 1099-NEC after January 31?
Filing after the deadline is possible, but you’ll owe penalties to the IRS. The penalty increases the longer you delay. The January 31 deadline is firm. If you miss it, file as soon as you can and expect to address the penalty in your next tax return or correspondence with the IRS.
Do I owe sales tax on payments to contractors in Florida?
It depends on the type of work. Labor, when separately stated on the invoice, is generally not taxable. Materials are taxable. If the contract is lump-sum with no breakdown, the full amount may be taxable. Review the Florida Department of Revenue guidelines for your specific industry, or ask your CPA. Contractors you hire for cleaning, landscaping, or construction often trigger sales tax liability if materials are included.
Should I ask contractors for W-9 forms before I pay them?
Yes. A W-9 form (Request for Taxpayer Identification Number and Certification) confirms the contractor’s legal name, tax ID, and status as a non-employee. Request it when you first engage the contractor, before you make the first payment. Keep it on file. It protects you and ensures you have accurate information for the 1099-NEC.
This article is for general educational purposes and isn’t a substitute for advice from a licensed CPA or tax attorney. Rules vary by jurisdiction and change over time — always confirm current requirements with the Florida Department of Revenue or your advisor.
Taking action before the deadline
January 31 will arrive whether you’re ready or not. The only way past it is through preparation. Pull your contractor payment records, verify you have W-9s on file with correct tax IDs, sum the payments per contractor, and identify which contractors hit the $600 threshold. Issue the forms, send copies to the contractors, and file with the IRS. If accounting isn’t your natural habitat, bring in your CPA or use a structured business process outsourcing strategy to centralize contractor and transaction data. The deadline is rigid, but your pathway to meeting it can be as simple or as supported as you need it to be.
This article is for general educational purposes and isn’t a substitute for advice from a licensed CPA or tax attorney. Rules vary by jurisdiction and change over time — always confirm current requirements with the Florida Department of Revenue or your advisor.
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