Which W-2 and 1099 Forms Does My Small Business Have to File?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

Information returns tell the Internal Revenue Service (IRS) what you paid other people. You file Form W-2 for each employee and Form 1099-NEC for most non-employees you paid $2,000 or more for services in 2026. Both are due to the IRS (or the Social Security Administration for W-2) and to the worker by January 31. Collect a Form W-9 from every contractor before you pay them.

What this means

The forms you’ll most likely file:

Form W-2. For each employee. Shows wages and taxes withheld. Give copies to employees by January 31 and file Copy A with the Social Security Administration (SSA) along with Form W-3.
Form 1099-NEC. For non-employee compensation, like payments to independent contractors. For payments made in 2026, the minimum is $2,000, up from $600. The IRS says it may be adjusted for inflation starting in 2027. Due to both the IRS and the contractor by January 31.
Form 1099-MISC. For some other payments, like rent. Due to the recipient by January 31, and to the IRS by February 28 on paper or March 31 if filed electronically.

Key rules from the IRS instructions:

Corporations are generally exempt, including LLCs taxed as corporations. Payments for legal services are an exception and are reported even when paid to a corporation.
Card and payment app payments are reported by the payment company on Form 1099-K, not by you on Form 1099-NEC.
Electronic filing is required if you file 10 or more information returns in total for the year.
Form W-9 collects the contractor’s taxpayer ID number. If a payee doesn’t give you one, backup withholding rules can apply.

Made-up example: Fern and Stone Landscape Design pays a freelance drafter $4,500 by bank transfer during 2026. The drafter is a sole proprietor. The owner collected a W-9 before the first payment, so in January she sends a 1099-NEC to the drafter and files it with the IRS.

Why it matters

Penalties apply for late, missing, or wrong forms.
Missing taxpayer ID numbers create backup withholding duties you may not have planned for.
Contractors and employees need these forms to file their own taxes. Late forms damage trust.

Who this applies to

Every business with employees files W-2 forms. Any business that pays non-employees for services may need 1099 forms. If you only pay corporations, or pay only by card or payment app, you may have few or none. Many states have their own filing rules for these forms too, so check your state tax agency.

How to do it

Collect a W-9 from every contractor before the first payment.
Tag contractor payments in your books so you can total them by person at year end.
Note how you paid. Card and payment app payments usually don’t go on your 1099-NEC.
In early January, total payments for each contractor and each employee.
Prepare W-2 and 1099 forms through your payroll service, bookkeeping tool, or the IRS electronic filing system.
Send forms to workers and file with the IRS or SSA by January 31 (or the later 1099-MISC dates where they apply).
Check your state’s rules for copies or separate filings.
Fix errors quickly with corrected forms.

What proof to keep

Signed W-9 forms for every contractor
Copies of every W-2, W-3, and 1099 you filed
Filing confirmations
Year-end payment reports by person

Common mistakes

Waiting until January to ask for W-9s. Get them before you pay.
Using the old $600 limit for 2026 payments.
Sending 1099-NEC for card payments that the card company already reports.
Skipping attorneys because they’re incorporated.
Calling an employee a contractor to avoid payroll (see 23.3 Employee or Contractor).

When to get help from a pro

Certified public accountant (CPA) or payroll professional: at your first year end, or if you’re unsure whether someone is a contractor. Questions to ask:

Which of my payments need a 1099 this year?
Does my state require its own copy or filing?
How do I correct a form I already sent?

Bill’s note

[Bill: add a short note. For example, how you collect W-9s from SiteSmarty’s freelancers, or a January scramble you’d help others avoid.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how I collect W-9s and file year-end forms for SiteSmarty]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: contractor payment report or W-9 folder]
[Result so far:]

Questions people ask

What is the 1099-NEC limit for 2026? $2,000 for payments made in 2026. The IRS says it may be adjusted for inflation starting in 2027.

When are W-2 and 1099-NEC forms due? January 31, to both the worker and the government.

Do I send a 1099 to a corporation? Usually not. Payments for legal services are an exception.

What if I paid by credit card or a payment app? Those payments are generally reported by the payment company on Form 1099-K, not by you.

Do I have to file electronically? Yes, if you file 10 or more information returns in total for the year.

Audit check

Question: Did the business file every required W-2 and 1099 on time, with a W-9 on file for each contractor?
Pass looks like: W-9s collected before payment. Payments tagged by person. All forms sent and filed by the due dates. Copies and confirmations saved.
Fail looks like: Missing W-9s. No 1099s for contractors paid by check or bank transfer. Late W-2s. Old limits used.
Evidence to collect: W-9 folder, year-end payment report, filed forms, and filing confirmations.

Where this fits

Do this first: 10.3.4 Payroll Tax Deposits

Do this next: 10.3.6 New-Hire Reporting

Sources

IRS, "Instructions for Forms 1099-MISC and 1099-NEC" (checked October 17, 2026)
IRS, "Employment tax due dates" (checked October 17, 2026)
IRS, "Publication 15 (2026), (Circular E), Employer's Tax Guide" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.