Handling 1099s Effectively for Construction Contractors

When you're running a construction business, there’s already enough paperwork to keep track of. Then tax season rolls around, and you’ve got a stack of 1099s to figure out, too. These forms matter more than people think because they’re tied directly to tax preparation for a contractor. Missing even one can slow everything down or, worse, trigger IRS questions.

If you've ever thought, "Who exactly needs one of these?" or "Did I file them all correctly?" you're not the only one. Many contractors deal with 1099s at the last minute, only to feel stressed and uncertain. The good news is that with some planning and a better idea of how these forms work, staying on top of them becomes a lot more manageable.

What Is a 1099 and Why Does It Matter?

The 1099 form is what the IRS uses to track money that’s not paid through regular payroll. For contractors, this usually means paying subcontractors or vendors who work independently. These aren't employees, but you still need to report what they earned.

You’re required to give someone a 1099-NEC if you paid them $600 or more during the year for services related to your business. Many construction jobs involve outside help, like drywall crews, electricians, or site cleaners. If they’re not on payroll and they met the threshold, they probably need a 1099.

Here's why this matters. The IRS uses these forms to match income. If your subcontractor says they made $30,000 last year, but five different 1099s were filed showing $45,000, that triggers a red flag. Likewise, if someone gets paid but no 1099 is filed, that could fall back on you. Getting it right protects not just your workers, but your business too.

Who Needs to Get a 1099 from Your Business

Not everyone you pay needs a 1099. But getting that list sorted early saves problems later. You’ll need to issue one to anyone who:

• Worked for you as a non-employee (like a subcontractor)

• Was paid $600 or more over the course of the year

• Is not a corporation (most LLCs and sole proprietors count, but you still verify)

To keep things simple, collect a W-9 before making any payments. That form gives you the contractor’s legal name, address, and taxpayer identification number. It’s a small thing that makes filing 1099s much easier later on.

Tracking payments is the next part. Whether you use a digital tool or a written log, keeping up with who got paid, how much, and when will help a ton when it’s time to fill out forms. Don’t wait until the end of the year to pull this together, stay ahead from the start.

Builders Tax Group offers outsourced accounting solutions for construction contractors. We help you organize your vendor information, track payments, and prepare 1099 filings that meet IRS requirements.

Steps to Stay on Top of 1099 Filing

There are a few habits that make tax season a lot smoother. Simple doesn’t always mean easy, but it does make a difference.

• Update your records each time you pay a contractor, don’t wait

• Review your vendor list in early January, so you have time to double-check

• Submit 1099s by the IRS deadline, usually by the end of January

If your business is growing, using accounting software that tracks payments and flags when 1099s are needed can make the process simpler. It helps you stay organized and avoid forgetting someone.

This kind of recordkeeping is a major part of tax preparation for a contractor. When forms are filed correctly and deadlines are met, it builds trust and reduces the chance of audits or penalties. Don’t leave it to guesswork; a solid system reduces stress later.

Common 1099 Mistakes to Avoid

Some errors show up again and again. Most of them start with bad or missing information. For example, sending a form with an incorrect Social Security number or business name can result in a rejected filing. Other times, we’ve seen people forget to file one altogether, not because they didn’t mean to, but because payment records weren’t clear.

Here are a few avoidable missteps:

• Filing 1099s late or not at all

• Sending forms to corporations that didn’t need one

• Skipping the W-9 and then scrambling for info in January

• Reporting incorrect payment amounts from memory instead of records

Another issue is sending a 1099 to someone who isn’t supposed to get one, which can cause confusion or tax delays for them. The opposite happens too, realizing a contractor didn’t get a 1099 when the IRS deadline has already passed. That’s why double-checking in December helps.

When to Ask for Help with 1099s

There’s no shame in needing backup. If you find yourself second-guessing who should get a form or wondering whether you missed someone, that’s often the sign to bring in outside help. Not every contractor wants to keep up with tax rule changes and tight deadlines, and that’s okay.

Having someone who understands construction-specific needs makes a big difference. They’re not just filling out a form. They’ll know the kinds of work that trigger 1099 requirements and the best way to track payments ahead of time.

When you’ve got multiple subcontractors, temporary workers, and vendors across different projects, DIY tracking can turn messy fast. Letting someone else take that weight off your shoulders frees you up to focus on the job site.

Builders Tax Group specializes in helping construction contractors with year-round bookkeeping, 1099 preparation, and compliance for all required tax forms.

Get 1099s Right and Stress Less

Once you understand what 1099s are and who needs them, handling them becomes part of your regular system. It’s not about guessing, it’s about setting up habits that support your business year-round.

With clear records, a process for W-9 collection, and support when needed, there’s no reason 1099s have to trip up your tax season. Filing can be one more thing that works smoothly in the background while you stay focused on the work that really matters.

At Builders Tax Group, we understand how paperwork can quickly stack up when your attention is on job sites and deadlines. Having the right support makes a real difference, especially with something as detailed as tax preparation for a contractor. Whether you work with long-term partners or seasonal crews, staying organized during the year keeps tax filing straightforward. When you're ready to simplify the process, reach out to us. We’re here to help get it done right.