What do I fill out under Schedule C when subcontractor didn't provide me with a 1099?

Thanks for that clarification! So if I understand correctly, I don't need any 1099 forms to claim these expenses on my Schedule C? I guess I was confused about the direction of who issues what to whom. Do I need to issue a 1099 to them even though we've already moved into 2025? Is there a penalty if I didn't issue one to them?

Yes, you've got it right - you don't need any 1099 forms from your subcontractor to claim the expense on your Schedule C. The 1099 system works in the other direction: business owners issue 1099s to contractors they pay, not vice versa. Regarding issuing a 1099 to them - technically yes, you should have issued a 1099-NEC by January 31, 2025 if you paid them $600 or more in 2024. There can be penalties for not filing required 1099s, ranging from $50 to $290 per form depending on how late you file and whether the IRS determines there was intentional disregard. I'd recommend filing the 1099-NEC as soon as possible to minimize any potential penalties. You'll need their tax ID number (SSN or EIN) to complete the form.

Does it work if I'm using TurboTax? I'm in a similar situation but with multiple contractors and I'm confused about how to enter everything correctly.

I'm a bit skeptical - how does it help with the fact that OP should have issued 1099s but didn't? Can it help with late filings or just tell you what you already know?

Yes, it works perfectly alongside TurboTax! I used both last year. Taxr.ai helps you understand what documentation you need and where things go, then you can confidently input that information into TurboTax. It's especially helpful with multiple contractors since it organizes all your documentation requirements in one place. Regarding late 1099 filings, it actually does help with that too. It has a section specifically about compliance requirements that explains the process for late 1099 filings, including potential penalty calculations and step-by-step instructions for getting compliant. It provides the exact forms you need to file late and even explains how to handle contractor payments when you don't have their tax ID information.

Wait, how does this actually work? The IRS phone line always tells me the wait is too long and hangs up. Are you saying this service somehow gets you past that?

Yeah right. I've tried everything to get through to the IRS and nothing works. You're telling me this service magically gets you through when their own phone system won't even put you on hold? Sounds like a scam to me.

The service works by using an automated system that continually calls the IRS and navigates through their phone tree until it gets a place in the queue. Once it secures a spot, it calls you and connects you directly to that place in line. It's not magic - just smart technology that handles the frustrating part of repeatedly calling and navigating the initial prompts. Regarding skepticism, I get it. I was doubtful too until I tried it. The IRS phone system doesn't always reject calls - it's just that the window when they're accepting new callers to the queue is unpredictable and short. Claimyr essentially automates the process of calling back repeatedly until it catches that window, then connects you instantly. It saved me hours of redial frustration and helped me resolve my contractor documentation issues with actual IRS guidance.

That W-9 tip is really helpful! Is there a time limit for getting W-9s from contractors? What happens if they refuse to provide one?

You should try to get W-9s before making any payments, but there's no strict time limit. The important thing is having them before you need to file 1099s (January 31st of the following year). If a contractor refuses to provide a W-9, you're technically supposed to withhold 24% of their payment (called backup withholding) and send it to the IRS. You would then issue them a 1099 anyway, based on the information you do have, and note the backup withholding. Many small businesses aren't aware of this requirement, but it's the official IRS procedure for non-compliant contractors. In practice, most contractors will provide a W-9 when they understand you can't pay them their full amount without it.

Thanks for the correction! You're right - I was thinking of a proposed change that I thought had passed. This is why I shouldn't post tax advice late at night lol. Definitely stick with the $600 threshold unless you see an official announcement from the IRS.

Thanks for catching that! This is why I get so confused with taxes - there's so much conflicting information out there. I'll definitely stick with the $600 threshold and check the official IRS site. One last question - if I'm filing my taxes now but still need to issue late 1099s, should I wait to file my return until I've sent the 1099s, or can I do them separately?

You can file your tax return and issue the late 1099s separately - they don't need to be done at the same time. Your Schedule C deduction for the contractor payments is based on when you paid them in 2024, not when you issue the 1099s. The 1099s are information returns that tell the IRS (and your contractors) about payments you made, but they don't affect your ability to claim the business expense on your return. Just make sure to issue those 1099s as soon as possible to minimize any late filing penalties. The sooner you get them filed, the lower the penalty will be.