A one-time job has a funny way of becoming a few more invoices.

You hire someone for a small project. You figure you probably won’t pay them enough to need a 1099, so asking for their tax information can wait. Then you need them again. And again.

By the time you add everything up, you need information you never collected. Hopefully, they’re still easy to reach.

There’s good news for small businesses this year: for payments made in 2026, the general federal Form 1099-NEC reporting threshold has increased from $600 to $2,000. That generally means reporting $2,000 or more in qualifying service payments to the same nonemployee during the calendar year. These are the 2026 payments reported in early 2027. IRS guidance

I think this is a welcome change. Small business owners have plenty of administrative work already, and fewer required forms can mean less time and expense spent on year-end reporting.

My concern is that the higher threshold will make it even easier to put off getting a W-9.

The problem with “I’ll get it later”

I understand why it happens. The work needs to get done, the invoice needs to be paid, and a tax form doesn’t feel especially urgent when you’re expecting a small, one-time expense.

But the amount you expect to spend at the beginning isn’t always the amount you end up spending.

And sometimes, the working relationship ends before you get around to the paperwork. The person may have changed their contact information or stopped responding. If things ended badly, tracking them down to ask for their tax information probably isn’t high on anyone’s list of things they want to do.

Now you’re trying to finish your 1099s while chasing someone you haven’t spoken to since the summer. January already has enough going on.

I’d much rather have the information on file than hope I can get it when I need it.

Make the W-9 part of getting started

For a U.S. independent contractor, Form W-9 is the usual way to request the name and taxpayer identification information you may need for reporting. The IRS describes collecting it as the first step after determining that the worker is an independent contractor. IRS contractor guidance

My recommendation is to make that request part of setting up the contractor, ideally before the first payment. You’re already exchanging information at that point. Getting the form then means one less loose end to remember later.

Use a secure way to collect and store it, and make sure whoever handles your bookkeeping knows it’s available. A completed W-9 contains sensitive tax information, so it deserves more care than an ordinary invoice.

Then keep tracking payments throughout the year. Looking at each invoice by itself won’t tell you whether the annual total of reportable payments has reached the threshold.

Before you change your process

The $2,000 amount is a general federal 1099-NEC threshold, not a universal rule for every 1099. The type of payment, the recipient’s tax classification, and how you paid can affect the reporting requirement. State requirements also need a separate check. IRS filing instructions

A missing taxpayer identification number can also create backup-withholding obligations in applicable situations. If someone won’t provide their information, ask for guidance before assuming it can wait until year-end. IRS backup-withholding guidance

For now, pull up your contractor list and see whose information is missing. There’s still time to ask while the work is fresh and the person is reachable.

I’m happy to see small businesses get a break on reporting. Let’s keep the W-9 habit, enjoy having fewer forms to prepare, and give January one less thing to chase.

If you’d like help reviewing your contractor list before year-end, get in touch with us at Century.