5/15/2026
Every January, small business owners start asking the same questions.
Who needs a 1099? What if they are an LLC? What about Stripe or PayPal payments?
If 1099 season felt stressful this year, you are not alone.
Most 1099 problems are not tax problems.
They are bookkeeping system problems.
Understanding who requires a 1099 and building the right structure during the year makes January simple instead of chaotic.
Form 1099 NEC reports payments made to non employees for services.
In general, you must issue a 1099 NEC if:
• You paid an individual or partnership $2000 or more
• The payment was for services
• The person was not your employee
That sounds straightforward. The confusion comes from the details.
Many business owners assume LLCs do not receive 1099s.
That is not always true.
It depends on how the LLC is taxed.
A single member LLC taxed as a sole proprietor typically does receive a 1099. An LLC taxed as an S corporation generally does not.
The only way to know is by collecting a W9 before payment.
Without that form, you are guessing.
Payments to attorneys generally require a 1099, even if the firm is incorporated.
This catches many business owners off guard.
Understanding exceptions matters.
If you paid a vendor through a credit card or third party processor such as PayPal, Square, or Stripe, you generally do not issue a 1099 NEC for those payments.
The processor may issue a 1099 K instead.
This is where clean bookkeeping becomes essential.
You must know how vendors were paid and categorized throughout the year.
Most 1099 chaos happens because:
• W9 forms were not collected • Vendors were not classified correctly • Payments were not tracked clearly • Books were not reviewed monthly
Strong bookkeeping systems make 1099 season routine.
If your books have felt messy or behind this year, you may want to start with strengthening your overall bookkeeping process first. Clean systems make compliance predictable.
From Chaos to Confidence begins with structure you can trust.
If you would like support building a bookkeeping system that makes 1099 season calm instead of chaotic, you can schedule a conversation here: https://bit.ly/mswintake
-Stephanie
MSW Accounting, LLC.
Ready, Set, Grow
I’m Stephanie, accountant extraordinaire — and at MSW Accounting, we actually like bookkeeping so you don’t have to. I’m so glad you found your way here. Our team helps business owners move from chaos to confidence with their books because, let’s be honest, “winging it” isn’t a strategy. Our goal is to take the stress out of bookkeeping and show how clear numbers can lead to smarter decisions and stronger growth. If money management has ever felt overwhelming, you’re not alone. This is where you move from guesswork to growth (and finally retire that shoebox full of receipts).