Financial Glossary
Who Files Form 1099
Form 1099 is an information return filed by a payer to report certain payments made to non-employees, such as independent contractors, freelancers, and some vendors. The party that made the qualifying payment is responsible for completing and filing the form with the IRS and furnishing a copy to the recipient. The recipient does not file the 1099 themselves; they use the copy they receive to report that income on their own tax return.
Problem & Application
STR managers, campground operators, and small businesses commonly hire cleaners, maintenance crews, photographers, and other contractors, which can trigger 1099 filing obligations when payments to a given vendor reach the IRS reporting threshold. Knowing that you, the payer, are the filer means you need to collect a Form W-9 with the contractor's taxpayer information before you pay them, so you can issue an accurate 1099 after year-end. Missing or late 1099s can lead to penalties, so this is a recurring compliance task rather than a one-time event.
In Short
If your business pays contractors, you are the one responsible for issuing and filing their 1099s, so collecting W-9s up front keeps year-end filing clean.