Quarterly BAS Due (July–September)
Form 1099-NEC & Contractor Payment Reporting Check
Why this matters.
If your business pays independent contractors, freelancers or other non-employees for services, the Internal Revenue Code requires you to report those payments to the IRS and to the contractor. Under IRC §6041A, nonemployee compensation is reported on Form 1099-NEC, which must be filed and sent to the payee by January 31 (IRC §6071(c)). For payments made in 2026 onward, the One Big Beautiful Bill Act (Public Law 119-21) raised the reporting threshold from $600 to $2,000 per payee per year, with inflation adjustments after 2026, so the forms you file in January 2027 follow the new limit. Rents, prizes and certain other payments go on Form 1099-MISC instead.
The rules catch more small businesses and freelancers than people expect: a sole proprietor who hires a subcontractor, designer or bookkeeper is a payer too. You should collect a Form W-9 before paying, because if a contractor fails to give a valid taxpayer identification number you must withhold 24% backup withholding under IRC §3406. Late, missing or incorrect forms attract per-return penalties under IRC §6721 and §6722 that rise the later you correct them and are much higher for intentional disregard, and businesses filing 10 or more information returns in total must file electronically. Misclassifying a worker as a contractor can also bring payroll tax liabilities. This check helps you get ready before the January 31, 2027 deadline.
