Year-end · 4 minute read
Missed the 1099 deadline? What it costs and how to fix it
If you missed the 1099-NEC deadline, file as soon as you can. For returns due in 2027, the IRS penalty is $60 per form if you file within 30 days, $130 per form if you file by August 1, and $340 per form after that. A separate penalty can apply for the copy you owe the sub, so the cost per form can double.
The penalty grows the longer you wait
For 2026 payments, 1099-NECs are due February 1, 2027, both to the IRS and to each sub. January 31 falls on a Sunday, which pushes the deadline to Monday.
Miss it, and the penalty depends on how late you are. For information returns due in 2027, the amounts set in IRS Revenue Procedure 2025-32 are:
- Filed within 30 days of the deadline: $60 per form
- Filed after 30 days but by August 1: $130 per form
- Filed after August 1, or never: $340 per form
- Intentional disregard: at least $690 per form, with no annual cap
Small businesses get annual caps on the first three tiers. Intentional disregard has none.
Ten subs filed in March costs $1,300 at the second tier. The same ten filed in September costs $3,400. Same forms. Same mistake. Six months of procrastination worth $2,100.
You can owe the penalty twice on the same form
The IRS treats the form you file with the IRS and the copy you give the sub as two separate obligations.
Miss both, and two penalties can apply to the same 1099. That's why "I'll just send the IRS copy later" doesn't save as much as people think. Send both, together, as fast as you can.
Step one: file now, even if it's not perfect
The single biggest lever is time. Every day you wait pushes you toward the next tier.
If you're missing a W-9 for one sub, file the others now and keep chasing that one. Our guide on collecting W-9s from your subs has the message to send.
Step two: file electronically, and know that the system changed
If you file 10 or more information returns in a year, counting W-2s and every type of 1099 together, the IRS requires you to file electronically.
The IRS is also retiring its old FIRE system. Starting in 2027, the IRS's IRIS system is the way to e-file information returns, including corrections and late filings. QuickBooks and most 1099 filing services file for you, so you may never touch IRIS directly. If you've filed yourself through FIRE in the past, check what changed before you file this time.
Step three: fix wrong forms with a correction, not a second original
Filed on time but with the wrong amount or the wrong taxpayer ID? That's a correction, not a new filing.
File a corrected 1099-NEC, marked as corrected, and send the sub a new copy. Filing a second original for the same sub makes it look like you paid them twice.
Step four: if you had a real reason, ask for relief
The IRS can waive information return penalties for reasonable cause: something outside your control that you acted on as soon as you could. A house fire counts. "The bookkeeper quit in December" usually doesn't.
If a penalty notice arrives and you think you qualify, talk to your CPA before you respond.
The real fix happens in March, not January
Late 1099s are almost never a January problem. They're a books-behind problem that January exposes.
When subs are coded to the right vendor every month and W-9s are collected before the first check, the 1099 list is a report, not a project. That's how our monthly bookkeeping works, and it's why your CPA wants clean books in January.
What to do this week
Count the subs you paid $2,000 or more in 2026 and check that each has a W-9 on file. If the books aren't current enough to answer that, the Year-End Rescue gets you there before February 1. Not sure if you're behind? Here are the signs your books are behind.
General information, not tax advice. Penalty amounts are adjusted for inflation each year, so confirm the current figures on irs.gov or with your CPA.