Missing a 1099 form can feel like a big mistake, but it’s one many business owners make. The key is to act quickly. The longer you wait, the more likely you are to face growing penalties, or an IRS notice down the line.
Maybe you forgot to send a form, or you didn’t realize a vendor qualified for one. Maybe you assumed someone else on your team handled it. Whatever the reason, most 1099 mistakes can be corrected without long-term damage, if you take the next step now.
This article will help you understand what went wrong, what to do about it, and how to protect your business moving forward. You’re not the first person to miss a filing. What matters is what you do next.
What is IRS Form 1099?
IRS Form 1099 isn’t one single form. It’s a family of forms the IRS uses to track payments made to non-employees. If your business pays independent contractors, landlords, attorneys, or service providers who aren’t on payroll, there’s a good chance you’re required to file.
The most common types include:
- 1099-NEC: Used for non-employee compensation, such as payments to independent contractors or freelancers
- 1099-MISC: Used for things like rent payments, prizes, awards, and other types of miscellaneous income
- 1099-INT: Reports interest income
- 1099-DIV: Reports dividend payments
- 1099-B: Covers broker transactions and barter exchanges
In general, if you paid $600 or more to someone who isn’t on your payroll, and who isn’t a corporation, you likely need to file a 1099. There are exceptions, but this is the rule of thumb.
These forms aren’t just about IRS compliance. Filing 1099s helps keep your records clean, supports your vendors and contractors with their own tax filings, and reduces your audit risk. It’s part of running a business that’s organized, transparent, and ready to grow.
What happens if I don’t file required 1099s?
Missing a required 1099 can lead to more than just a headache. The IRS applies penalties on a sliding scale depending on how late your filing is:
- $50 per form if filed within 30 days after the deadline
- $110 per form if filed more than 30 days late but before August 1
- $290 per form if filed after August 1 or not filed at all
- Over $580 per form if the IRS determines you intentionally disregarded the requirement
These penalties can add up fast, especially if you missed multiple forms. But the cost isn’t just financial. Failing to file 1099s also increases your audit risk. And it can put strain on vendor relationships, especially if your contractors are waiting on those forms to complete their own tax returns.
In rare cases, ongoing failures or falsified records can raise red flags that lead to fraud investigations. That’s not the norm, but it is a reason to take missed filings seriously and resolve them promptly.
How do I figure out which 1099s I missed?
Start by reviewing your payment records for the tax year in question. Go through your books, accounting software, or bank statements and look for any vendors or service providers who:
- Were paid $600 or more; and
- Are individuals, sole proprietors, or unincorporated businesses; and
- Did not receive a 1099 form from you
Create a list of these payees and compare it to your past 1099 filings. You may also want to revisit prior years to see if there’s a pattern or if any contractors were consistently missed.
Once you’ve identified the gaps, take note of which 1099 type applies to each case and confirm the calendar year those payments were made. Getting clear on what’s missing is the first step toward fixing the issue and staying compliant going forward.
How do I fix a late or missed 1099 filing?
Once you’ve identified which 1099 forms were missed, it’s time to take action. The good news is that fixing the issue is usually straightforward, especially if you stay organized and move quickly. The goal is to correct the records, keep your contractors informed, and minimize penalties.
Here’s how to do it:
- Gather the details: You’ll need the recipient’s full legal name, mailing address, and taxpayer identification number
- Verify amounts: Double-check how much you paid them during the calendar year, and make sure it meets the $600 threshold for reporting (or the applicable threshold for other 1099 types)
- Use the correct form: Select the right version of the 1099 for the year the payment was made. Do not use the current year’s form to report past years.
- File the form: The IRS encourages electronic filing, especially if you’re submitting more than 10 forms. Paper filing is allowed for smaller batches but must be accompanied by Form 1096.
- Send the recipient copy: Deliver a copy to the contractor or vendor as soon as possible, either by mail or secure electronic delivery
- Calculate late penalties: Review the IRS penalty chart to estimate what you owe. If you can pay when you submit, it helps demonstrate good faith.
If you don’t have the recipient’s tax ID, request it right away using Form W-9. Keep a record of your request. The IRS expects you to make a reasonable effort to comply, even if the form is late. Taking those steps now can help close the loop and reduce the chance of further issues later.
Can I get IRS penalties waived?
In some cases, you can get IRS penalties waived. The IRS may reduce or eliminate penalties if you can show “reasonable cause.” This means you had a valid reason for missing the filing and took steps to fix it once discovered. Examples that may qualify include:
- A serious illness or hospitalization
- Natural disasters or unexpected events
- Honest errors that were corrected promptly, with documentation
To request relief, you can submit a written statement along with the late filing or separately through a penalty abatement request. Explain clearly what caused the delay, how you fixed the issue, and what steps you’ve taken to avoid future problems.
Being transparent and proactive improves your chances of penalty relief. The IRS evaluates each case individually and often considers intent and effort when making decisions.
What if I receive an IRS Notice?
Getting a letter from the IRS can feel stressful but ignoring it won’t make it go away. Open it right away and read through the details carefully. The notice will explain what the IRS needs, whether it’s missing forms, corrections, or additional information, and when they need it.
If the request involves missing 1099s, gather your records and respond with complete, accurate documentation. Include a written explanation if something was filed late or if there’s confusion about what was required.
The most important thing is to meet the response deadline. Replying on time shows the IRS you’re addressing the issue seriously and can help reduce further penalties or enforcement action.
When to Call a Tax Professional
Sometimes it makes sense to bring in backup. If you’re feeling overwhelmed or unsure how to respond, a tax professional can step in and take the pressure off.
A qualified CPA or tax advisor can help you:
- Pinpoint which filings are missing or incomplete
- Prepare and file the correct forms
- Communicate with the IRS on your behalf
- Review your records to prevent future issues
If you’ve received a notice, expect significant penalties, or just want to be sure things are done correctly, reaching out sooner rather than later can save time and stress. The right advisor can help you move forward with clarity and confidence.
How to Avoid 1099 Mistakes
A missed 1099 can be corrected, but avoiding the problem altogether is always better. Putting the right systems in place means you’re not rushing to pull everything together in January. Instead, you’re already prepared.
Here’s how to stay ahead of the curve:
- Use accounting software that tracks contractor payments and flags when you cross the $600 threshold
- Assign responsibility for 1099s to a dedicated person or bookkeeper so it doesn’t get lost in the shuffle
- Set calendar reminders for both deadlines: January 31 for sending forms to recipients, and February 28 or March 31 for filing with the IRS
- Schedule regular internal check-ins to review vendor payments and ensure W-9s are on file early
- Use e-filing platforms or reliable payroll software to reduce the risk of human error and late submissions
These habits don’t just reduce mistakes; they give you peace of mind knowing your records are solid and your systems are working. When tax season comes around, you won’t be reacting. You’ll be ready.
The Bottom Line
If you’ve missed a required 1099, the most important thing is to take action accurately and without delay. Go back through your records, gather what you need, and correct the issue before penalties grow or additional notices arrive.
Mistakes happen, even in the best-run businesses. What matters most is how you respond. Taking initiative to fix the error shows the IRS, and your vendors, that you’re committed to doing things right. It also helps you prevent small oversights from turning into bigger problems.
