Filing 1099s Electronically With the IRS: Step-by-Step Instructions

The IRS requires most businesses to file 1099s electronically, not on paper

If you issued 1099s to contractors or other non-employees in the past year, you must file them with the IRS electronically through a system called FIRE (Filing Information Returns Electronically) or through an approved third-party transmitter. Paper filing is only allowed in rare cases — generally when you have fewer than 250 returns to file in a calendar year and you meet specific conditions. Most businesses use a tax software provider, payroll service, or accounting firm to handle the transmission for them, which is simpler and faster than filing directly.

The important date to file 1099s with the IRS is March 31 of the year following the tax year (so March 31, 2024 for 2023 returns). You must also send copies to the recipients by January 31. Missing the IRS important date carries penalties that start at $50 per return and increase if the failure is intentional.

Key Takeaways

• You must file 1099s electronically through FIRE or an IRS-approved transmitter unless you have fewer than 250 returns and meet specific exemption rules.
• Most small businesses use tax software, payroll providers, or accountants to file electronically rather than submitting directly to the IRS.
• The IRS important date is March 31; you must send copies to recipients by January 31.
• You need an EIN (Employer Identification Number), a FIRE account, and the correct form type for each 1099 category you are filing.
• Common mistakes include mismatched names and Social Security numbers, missing required fields, and filing after the important date.

Decide whether to file directly or use a third-party service

Filing directly through FIRE requires you to create an account with the IRS, learn their file format requirements, and submit your returns yourself. This route works if you are comfortable with technical steps and have a small number of returns. Most businesses find it faster and safer to hire a tax software provider, payroll service, or CPA to handle the filing. These services format your data correctly, catch errors before submission, and handle the IRS communication if questions arise.

If you use payroll software like QuickBooks, ADP, or Gusto, the 1099 filing is often built in — you enter the contractor information during the year, and the software generates and files the forms for you. If you use a tax preparation service like TurboTax for Business or a CPA, ask whether 1099 filing is included in their fee. Many charge a small per-return fee (typically $5 to $15 per 1099) on top of their base service cost.

Set up a FIRE account if you are filing directly

To file through FIRE yourself, you must first register at irs.gov/fire. You will need your EIN, your business name and address, and a contact person's name and phone number. The IRS will send you a PIN by mail, which you use to log in and submit returns. This process takes one to two weeks, so register well before the March 31 important date if you plan to file directly.

Once your account is active, you read the FIRE software (or use the web upload option) and format your 1099 data according to IRS specifications. The IRS publishes detailed instructions for each form type — 1099-NEC, 1099-MISC, 1099-INT, and others all have slightly different field requirements. If even one field is formatted incorrectly, the IRS will reject the entire batch and you will have to resubmit.

Gather the correct information for each 1099 form

Before you file, verify that you have the correct details for every contractor or recipient. The IRS matches 1099s against the recipient's tax return using their name and Social Security number (or EIN). If either one is wrong or mismatched, the IRS flags it and the recipient may face a notice or delay in processing their return.

For each 1099, you need:

• Recipient's full legal name (as it appears on their Social Security card or tax return)
• Recipient's Social Security number or EIN
• Recipient's mailing address
• Your business name and EIN
• The dollar amount paid in the relevant category (nonemployee compensation, interest, dividends, etc.)
• Any applicable tax withheld (federal income tax, state tax, etc.)

If a recipient's name or number changed during the year, use the current information. If you are unsure of the correct spelling or number, contact the recipient and ask them to confirm what appears on their tax return.

Format and submit your file through FIRE or your service provider

If you are using FIRE directly, read the current year's software from irs.gov/fire and follow the step-by-step instructions to build your file. The software walks you through each field and validates your entries as you go. Once you have entered all returns, the software generates a file you upload to your FIRE account. The IRS confirms receipt and processes the file over the next few days.

If you are using a third-party service, the process is usually simpler: you enter contractor information into their form or upload a spreadsheet, they format it correctly, and they submit it to the IRS on your behalf. You typically receive a confirmation email once the IRS accepts the file. Keep this confirmation — it proves you filed on time if the IRS ever questions your submission.

The IRS accepts submissions starting in January and processes them continuously through March 31. Filing early (January or February) gives you time to fix any errors the IRS rejects before the important date.

Send copies to recipients by January 31

You must provide each recipient with a copy of their 1099 by January 31 of the following year — this is separate from filing with the IRS. You can send the form by mail, email (if the recipient agrees in writing), or through an online portal if your software supports it. Keep a record of how and when you sent each copy.

The recipient needs the form to file their own tax return. If they do not receive it by late January, they will contact you asking for a copy. If you cannot locate a recipient or they refuse to provide an address, you must still file the 1099 with the IRS by March 31 — the IRS will use the address you have on file.

Common mistakes to avoid when filing electronically

Mismatched names or numbers: The most frequent error is a recipient's name spelled differently than on their tax return, or a Social Security number that does not match their name. The IRS rejects these or flags them for the recipient's tax return. Before you file, cross-check each name and number against the W-9 the recipient signed.

Missing required fields: Each 1099 form type requires certain fields to be filled in. For example, a 1099-NEC must include the nonemployee compensation amount; a 1099-INT must include the interest paid. If you leave a required field blank, FIRE will reject the return. Review the IRS instructions for your specific form type before submitting.

Filing after the important date: The March 31 important date is firm. If you file after that date, you owe a penalty even if the IRS eventually accepts your file. If you realize in April that you missed the important date, file when ready anyway — the penalty is lower if you file late than if you do not file at all.

Forgetting to send copies to recipients: Some businesses file with the IRS but forget to send copies to the recipients by January 31. The recipient then has no proof of income and cannot file their return. You are required to send copies by that date regardless of whether the IRS has processed your filing.

Frequently Asked Questions

Can I file 1099s on paper instead of electronically?

Only if you have fewer than 250 returns to file in the calendar year and you meet other conditions set by the IRS. Most businesses do not may have access to for this exemption. Even if you do, the IRS encourages electronic filing because it processes faster and has fewer errors. Contact the IRS or a tax professional if you believe you may have access to for a paper filing exception.

What happens if the IRS rejects my file?

The IRS sends you an error report listing which returns failed and why. Common reasons are mismatched names or numbers, missing required fields, or incorrect dollar amounts. You correct the errors, resubmit the file, and the IRS processes it again. As long as you resubmit before March 31, you are considered on time.

Do I need to file 1099s for every contractor I paid?

You must file a 1099 for any non-employee to whom you paid $600 or more in a calendar year (the threshold is $20,000 and 200 transactions for payment card transactions, and varies for other categories). If you paid a contractor less than $600, you do not file a 1099 for them, though you may still owe income tax on the amount you paid.

What if a contractor's information changed after I filed?

If you discover an error after you have filed with the IRS, you can file an amended 1099 (marked as a correction) before the important date. After the important date, contact the IRS directly — they have a process for correcting filed returns. Also send a corrected copy to the recipient and ask them to file an amended tax return if the error affected their income.

Can my accountant or bookkeeper file the 1099s for me?

Yes. Your accountant or bookkeeper can register as a third-party transmitter with the IRS and file on your behalf. You provide them with the contractor information and payment amounts, and they handle the rest. This is one of the most common ways small businesses file 1099s.