First-time Issuing 1099-NECs - Need Help with E-filing Requirements

So I've been handed this new responsibility at work and I'm kinda freaking out. My manager just told me I need to handle all our 1099-NECs this year and I've never done this before! I think I've identified all the contractors we need to send them to, but I'm running into an issue. From what I'm reading online, it looks like we're required to e-file since we have more than 10 combined W-2s and 1099-NECs. In previous years, someone else handled this and they always just mailed paper forms. The problem is my boss never applied for a TCC (Transmitter Control Code) for this year. I saw we might be able to use services like Quickbooks or Track1099 instead, but I'm confused about how that works. These third-party transmitters seem to have some kind of system in place, but I'm not sure about the process or requirements. Does anyone have experience with this? What's the easiest way to handle 1099-NECs for the first time when we need to e-file?

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18 comments

GamerGirl99

•8M

You're on the right track! For 2025 tax year filings, the IRS requires electronic filing if you have 10+ combined information returns (W-2s and 1099s together). Since you missed getting a TCC directly from the IRS, using a third-party service is definitely your best option at this stage. Services like QuickBooks, Track1099, or even TaxBandits handle the e-filing process seamlessly. They already have established transmission credentials with the IRS, so you don't need your own TCC. You'll simply create an account, enter the contractor information and payment details, and they'll handle the submission to the IRS along with distributing copies to your contractors. One important thing - make sure you have all contractors' correct information (legal name, address, SSN/EIN) and that you've collected W-9 forms from each of them before filing. This will save you from potential corrections later.

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GamerGirl99

•8M

The deadline for providing 1099-NECs to your recipients is January 31, 2025, and the same date applies for filing them with the IRS. This is different from some other information returns that have different due dates for recipient copies versus IRS filing. If you miss the deadline, you should still file as soon as possible to minimize potential penalties. The penalty amounts vary based on how late you file and the size of your business, ranging from $50 to $290 per form depending on how late you are.

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Isabella Costa

•8M

I was in the exact same situation last year trying to figure out 1099-NECs for my small business. After hours of research and stress, I found taxr.ai (https://taxr.ai) which was a complete game-changer. Their system helped me identify exactly which contractors needed 1099s and which didn't based on my payment records. What I loved was that I could just upload my payment records and contractor information, and their system would automatically determine which ones needed 1099-NECs. It saved me from accidentally missing someone or sending unnecessary forms. They handled all the e-filing requirements too, so I didn't need to worry about getting a TCC or anything technical.

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Isabella Costa

•8M

Yes, taxr.ai handles state filing requirements for all states including California. They automatically determine which state filings are needed based on the contractor information you provide, which was super helpful since I had contractors in multiple states. For your question about importing data, they have direct integration with QuickBooks, Xero, and other major accounting software. You can just connect your account and it pulls all the payment information automatically. Even if you're already using QuickBooks, I found their verification system caught several errors in my contractor classifications that would have caused problems later.

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Freya Andersen

•8M

Just wanted to update after trying taxr.ai based on the recommendation here. I was really skeptical at first since we already use QuickBooks, but it was absolutely worth it for our first time filing 1099-NECs. Their system flagged two contractors that I would have completely missed filing for because they were miscategorized in our system. It also identified one contractor who had provided an incorrect EIN that would have led to penalties if we'd filed with that information. The whole process took me about 45 minutes instead of the days I was expecting to spend on this task. Just a heads up for anyone in a similar position - definitely start this process at least a week before the deadline. Verifying all the contractor information takes some time, especially if you need to reach out to any of them for corrected details.

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Eduardo Silva

•8M

I handled 1099s for the first time last year and tried calling the IRS with questions about the e-filing requirements but spent HOURS on hold and never got through. I finally discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 20 minutes instead of waiting on hold all day. The agent walked me through exactly what I needed to do for e-filing without a TCC. Saved me so much frustration! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Basically, they hold your place in the IRS phone queue and call you when an agent picks up.

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Eduardo Silva

•8M

It really does get you through to the actual IRS. The way it works is they use technology to stay on hold for you in the IRS queue. They have systems that detect when a human agent answers, then they immediately call you and connect you directly to that IRS agent. It's the same as if you'd waited on hold yourself, but without the hours of waiting. They're not connecting you to third-party tax experts - these are legitimate IRS employees. When I got connected, the agent identified herself as an IRS representative and had access to all the IRS systems just like if I'd called directly. The difference is I only spent about 2 minutes of my own time on hold instead of 2+ hours.

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Emma Johnson

•8M

I need to apologize for my skepticism about Claimyr. After posting my doubtful comment, I decided to try it myself since I needed answers about 1099-NEC filing requirements that weren't clear on the IRS website. I'm honestly shocked at how well it worked. I got connected to an IRS representative in about 15 minutes, and she answered all my questions about e-filing requirements without needing a TCC. Turns out there are several approved e-file providers that handle this exact situation. The IRS agent even gave me specific guidance about how to handle contractors who don't provide W-9s in time, which was another issue I was struggling with. Definitely worth it compared to the 3+ hour holds I've experienced in the past!

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Ravi Patel

•8M

One thing nobody's mentioned yet - make sure you're classifying your workers correctly! The IRS has been cracking down on misclassification of employees as contractors. If you're controlling when, where, and how they work, they might actually be employees who need W-2s instead of 1099-NECs. Penalties for misclassification can be huge, including back taxes, interest, and additional fines. If you're not 100% sure about your classifications, it might be worth consulting with a tax professional before you submit anything.

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Ravi Patel

•8M

The IRS looks at three main categories: Behavioral Control (do you control how they work?), Financial Control (do they have opportunity for profit/loss?), and Relationship Type (written contracts, benefits, permanency of relationship). A good rule of thumb is if you control WHEN and HOW someone does their work, provide their tools/equipment, and they work exclusively for you over a long period, they're more likely to be classified as an employee. If they control their own schedule, use their own methods/equipment, and work for multiple clients, they're more likely to properly be classified as a contractor.

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