The $600 Rule That Every Business Owner Needs to Know

3 Steps to a Stress-Free 1099s

1099s may not be due until January 31 of next year, but waiting until the new year to start collecting them is one of the biggest headaches we see businesses self-inflict.  

As a reminder: For every vendor, independent contractor, etc. that you paid $600 or more to in 2025, you must issue a 1099-NEC. 

(Didn’t even realize that’s a thing? You’re not alone. Just ask our one client we saved a $25,000 penalty because they, too,  were completely unaware of this requirement!)

So, with that, here’s our advice on what you can start now:

• Collect W-9s from all vendors and contractors because chasing them in January is a nightmare
  
  

• Confirm workers are classified correctly ( we find that W2 vs. 1099 mix-ups are one of the most common—and costly—mistakes)
  
  

• Double-check vendor names and taxpayer IDs match IRS records

So remember: 

Start now and you’ll thank yourself later. 

And if you want to take this off your plate entirely, YBO can manage the 1099 process from vendor review to filing. If interested, simply reach out to your YBO partner, or if you’re not yet a client, just reply to this email and we’ll start helping you organize today!