The 1099-NEC (Non-Employee Compensation) is an IRS form used by business owners (like house flippers) to report payments made to independent contractors for their services. This ensures the IRS can track the income earned by contractors who are not on your regular payroll.
What is the purpose of Form 1099-NEC?
The 1099-NEC (Non-Employee Compensation) is an IRS form used by business owners (like house flippers) to report payments made to independent contractors for their services. This ensures the IRS can track the income earned by contractors who are not on your regular payroll.
Who is required to receive one?
Generally, you must issue a 1099-NEC if you paid a vendor $600 or more during the 2025 tax year, provided they meet these criteria:
- Independent Contractor: They are not your employee.
- Eligible Entity: They are an individual, a Sole Proprietor, a Partnership, or most LLCs. (C-Corps and S-Corps are typically exempt).
- Business Related: The work was performed for your investing business (e.g., a plumber for a flip), not for your personal residence.
Which payment methods are reportable?
This is a critical distinction to avoid double-reporting:
- Report on 1099-NEC: Payments made by Cash, Check, or ACH (Direct Deposit).
- Do NOT Report on 1099-NEC: Payments made via Credit Card, Debit Card, Venmo, or PayPal. These services are required to report those payments themselves via Form 1099-K.
What is the filing deadline?
For the 2025 tax year, the deadline to furnish a copy to your vendors and file with the IRS is Monday, February 2, 2026.
How FlipperForce helps you stay compliant:
Our Vendor 1099 Report automatically aggregates every payment you've logged in the Expense Tracker across all your projects. It then filters for vendors who hit that $600 threshold, allowing you to export a clean CSV for bulk e-filing in minutes.
