Preparing Your Law Firm for the January 31st 1099 Deadline

For law firms and attorneys, filing 1099 forms is a critical part of maintaining compliance with IRS regulations. With the January 31, 1099 deadline fast approaching, understanding the filing procedures for Form 1099-NEC and Form 1099-MISC is essential to avoid errors and penalties. 

In this blog, you’ll learn best practices to help your firm streamline its 1099 preparation process to meet the 2025 1099 filing deadline. We’ll cover the procedures for filing Form 1099-NEC and Form 1099-MISC, penalties for late filings, and how tools like MyCase can simplify vendor reporting and payment tracking so your firm can avoid last-minute headaches and hit the 1099 form deadline. 

What is the Procedure for Filing 1099 Forms by Deadline? 

Understanding how to file 1099 forms, including Form 1099-NEC and Form 1099-MISC, should be part of your law firm’s financial strategy to ensure compliance with the IRS and avoid penalties. By following clear, step-by-step procedures, you can ensure accurate reporting and meet the January 31, 2025, deadline for filing 1099s. 

How to File Form 1099-NEC 

Form 1099-NEC (nonemployee compensation) is designed for reporting payments of $600 or more to independent contractors, freelancers, or other nonemployees. 

The Form 1099-NEC filing procedure involves the following steps:

• Identify reportable payments: Determine if you paid $600 or more to nonemployees during the calendar year. These payments are subject to Form 1099-NEC reporting.

• Collect recipient information: Use a downloadable W-9 Form to obtain the recipient’s legal name, address, and Taxpayer Identification Number (TIN).

• Complete the form: Fill out Form 1099-NEC with the recipient’s details, total amount paid, and your business information. Double-check for accuracy. 

• Distribute copies: Provide a copy of Form 1099-NEC to the recipient by January 31 so they can report the income on their tax return. 

• File with the IRS and state: Upon form completion, submit Form 1099-NEC to the IRS and required state. The 1099 filing deadline for 2025 is January 31. 

• Report corrections: If you discover incorrect information on a previously submitted 1099, report the correction to the IRS as soon as possible to avoid penalties.

How to File Form 1099-MISC 

Form 1099-MISC is used to report miscellaneous compensation over $600 that would not be classified as wages for employees or contractors. This includes payments such as rent, royalties, prizes, awards, and certain types of medical and healthcare payments. 

The Form 1099-MISC filing procedure involves the following steps: 

• Identify reportable payments: Determine if you paid $600 or more during the year for items like rent, prizes, awards, or other miscellaneous income that qualify for reporting.

• Collect recipient information: Use Form W-9 to obtain the recipient’s legal name, address, and TIN.

• Complete the form: Fill out Form 1099-MISC with accurate details about the recipient, the payment amount, and your business information.

• Distribute copies: Provide a copy to the recipient. The deadline to send 1099s to recipients is January 31.

• File with the IRS: Submit a copy to the IRS by February 28 if filing by paper or by March 31 if filing electronically. The IRS requires e-filing if your firm submits 10 or more information returns in a year.  

What Are the Penalties for Not Filing 1099 Forms on Time?

Failure to meet the deadline for 1099s can result in financial and legal penalties as well as IRS scrutiny. Understanding key tips and common errors when filing a 1099 form can help avoid these issues and ensure compliance. Penalties for late or missing filings are based on the duration of the delay:

• Within 30 days after the 1099 deadline: $60 per form; maximum penalty of $232,500 for small businesses.
• More than 30 days late but before August 1: $130 per form; maximum penalty of $664,500 for small businesses.
• After August 1 or not filing at all: $330 per form; maximum penalty of $1,329,000 for small businesses.
• Intentional disregard: $660 per form; no cap on total penalty. 

How Does MyCase 1099 Vendor Reporting Make it Easy to File 1099 Forms by Deadline?

MyCase Accounting streamlines the entire 1099 process to help your law firm stay organized and compliant as the 1099 filing deadline for 2025 approaches. From identifying eligible vendors to generating necessary reports, MyCase’s built-in tools ensure that meeting tax requirements and 1099 deadlines is easier, faster, and less stressful.

User-Friendly Vendor Management

MyCase Accounting’s intuitive vendor management interface lets your firm mark vendors as 1099-eligible from the start, ensuring you never lose track of who needs a form at year’s end. Vendors can be flagged as 1099-eligible during setup or updated later as needed, offering flexibility to fit your workflow. 

With all vendor information centralized in one place, managing details such as tax IDs and eligibility status becomes seamless. The “Vendor” tab within the Bills and Expenses section serves as a single source of truth for all vendor data, providing a streamlined approach to maintaining accurate and up-to-date records.

Simplified Vendor Payment Tracking

MyCase Accounting eliminates the need for sifting through spreadsheets by automatically logging all vendor payments, making it easy to track who exceeds the $600 threshold. With powerful filters for date range and vendor type, firms can quickly identify vendors requiring a 1099, removing the guesswork and saving time on manual calculations.

Convenient 1099 Form Filing 

With MyCase Accounting, you can file your 1099s with confidence and efficiency, streamlining a traditionally time-consuming process. When it’s time to file, MyCase lets you easily export your 1099-eligible vendor data into a “1099 NEC CSV” that can be uploaded into online filing tools like Tax1099. Having this data readily available not only saves valuable preparation time but also reduces the risk of errors associated with manual input. 

Built-in IRS Compliance 

Accurate expense management and reporting are vital for law firms, as discrepancies between the amounts reported on a 1099 for attorney fees and the income declared by the vendor can trigger red flags for the IRS. 

MyCase Accounting simplifies 1099 vendor tracking and reporting, helping you meet 1099 deadlines and stay compliant with IRS regulations. By allowing accurate classification of 1099-eligible vendors and generating comprehensive reports, MyCase ensures precise and timely filings, reducing the risk of penalties. The platform also offers a direct path to accessing IRS guidelines and helpful Q&A resources for a streamlined approach to meeting regulatory requirements.

Simplify 1099 Form Management With MyCase Today 

Meeting the 2025 1099 filing deadline doesn’t have to be a stressful or time-consuming process for your law firm. By following the outlined procedures for Form 1099-NEC and Form 1099-MISC and leveraging tools like MyCase Accounting, your practice can stay compliant, avoid penalties, and focus on delivering outstanding client outcomes. 

Ready to make the tax season hassle-free and meet the 2025 1099 filing deadline with ease? Book a free MyCase demo today.