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Finaloop provides a dedicated 1099 Tracking page each year to help you and your tax preparer collect, review, and organize all the information needed for filing Form 1099s.
Finaloop does not file 1099s for you. Instead, we give you a clean, accurate dataset that your accountant or filing provider can use to complete the official submission. Most customers file through Tax1099 or work directly with their CPA.
This guide walks you through how to prepare your 1099 information correctly inside Finaloop.
To learn more about the general requirements of 1099s, check out this blog.
Want to Avoid Penalties? Read this first.
1099 Forms have strict deadlines imposed by the IRS.
The due dates for 1099 filing are listed below. Keep in mind that if they fall on a weekend, they’re pushed to after the weekend is over.
These are not deadlines to miss because the penalties are real and they add up fast:
$60 per form if you're up to 30 days late
$130 per form if you're 30+ days late (but before August 1st)
$330 per form if you file after August 1st
$660 minimum per form if the IRS thinks you're intentionally ignoring the rules
The good news is that these penalties are completely avoidable with proper planning.
To learn more check out this blog.
1. 1099 Tracking in Finaloop
The 1099 Tracker is released only in the first week of January so we can be sure to include your full year of transactions.
To locate your 1099 Tracker:
Navigate to Vendors in your navigation menu.
Then click on 1099 Tracking - 2025.
Remember, you won't see this option before early January.
In your tracker, you’ll find important instructions at the top of the page, as well as separate tables for each 1099 type, including:
1099-NEC (Nonemployee compensation)
1099-INT (Interest income)
1099-MISC (Miscellaneous income, like rent, royalties, prices, etc.)
1099-DIV (Dividends and distributions)
In each 1099 table, you’ll find the following columns:
Payee - Name of the vendor or service provider
Category - how the transaction is categorized in Finaloop
Amount - Total paid to the payee throughout the year
Source - The source of data with a link to the transaction
Disqualify from 1099 - whether the payee was disqualified from 1099 requirements
Documentation (where you can upload or view W9s)
2. Preparing Your 1099s
Preparing your 1099s requires four steps. Follow each step carefully to ensure your data is accurate before filing.
Step 1: Categorize any open transactions for the year
Step 1: Categorize any open transactions for the year
Your 1099 report is based on categorized transactions. Make sure everything in your account is fully categorized so no potential vendors are excluded from this list.
First, confirm that all banking-related missions are complete:
Go to Missions.
Complete any open banking missions to ensure your data is up to date.
Next, review uncategorized transactions:
Go to Transactions.
Check the box: Waiting for input.
Categorize anything remaining.
Step 2: Review your 1099 payee list
Step 2: Review your 1099 payee list
The 1099 Tracking page automatically lists any relevant payee for the year.
Your job is to confirm that the list reflects the true service providers who require 1099s.
Identify the real payee
Some payments appear under the name of a payment platform (for example Amex, Wise, Payoneer, Zelle).
In these cases, update the underlying transaction with the actual vendor name.
You can find a link to the original transaction under the Source column.
Merge duplicate payees
If the same vendor appears under slightly different names, select the entries and click Merge.
Disqualify payees who should not receive a 1099
Select the payee and click Disqualify from 1099. Choose the appropriate reason from the list, such as:
The payee is a corporation
The payee is a non US taxpayer
The payee does not provide services
The payee provides freight or storage services (these are excluded from 1099 rules).
Employees vs contractors
Payments to employees are reported on Form W-2 and not Form 1099.
Make sure contractor payments are categorized as contractor expenses and not as salaries, wages, or officer compensation.
If you are unsure how to classify a worker, review our guidance here.
Step 3: Confirm data accuracy
Step 3: Confirm data accuracy
The data on your 1099 Tracking page reflects transactions categorized by you or by our team.
Since you know your business best, review your payees and totals to catch anything missing or incorrect.
If you see a discrepancy:
Click on the link under the Source column (or, for missing transactions go directly to the Transactions page.)
Update the payee name or category as needed.
Payee and category updates sync to the 1099 Tracking page every three hours.
Step 4: File your 1099 forms
Step 4: File your 1099 forms
The final step is filing. Most Finaloop customers file through Tax1099, which handles e-filing quickly and affordably.
You may also choose to file through your CPA or tax preparer. If needed, you can invite your tax preparer to your Finaloop account to review your data.
If you are not familiar with the 1099 process, we recommend consulting a tax professional.
3. Understanding Each 1099 Type
Below is a summary of the four 1099 forms most commonly supported within Finaloop.
1099-NEC
1099-NEC
Due January 31
Required for payments of $600 or more made to non employees for services.
Examples include contractors, consultants, designers, agencies, coaches, and similar service providers.
Exclude:
Corporations
Non US taxpayers
Vendors who do not provide services (e.g., inventory vendors)
Freight and storage providers
The 1099 table in Finaloop includes all service-related payments we identified. We excluded any payments to non-relevant providers (e.g., a corporation or a foreign person) to the extent we were able to clearly identify them as such. Since we don’t always have the available information regarding their tax status, it’s important to review the list and exclude any service providers that are exempt from 1099 filing.
Important notes:
1. If you pay a contractor using the family and friends option on PayPal, Venmo, or a similar payment platform, a 1099-NEC will be required to be issued. This is because the family and friends payment option is for personal payments and is not meant for business payments. Therefore, these payment platforms do not include those payments in their reporting to the IRS.
2. In some cases, businesses compensate influencers or service providers with free products instead of cash. Depending on the facts and circumstances, the fair market value of those products may need to be reported as compensation on a Form 1099.
In Finaloop, product giveaways are treated as promotions to customers (i.e., a marketing expense) and not as a payment for a service, so they are not included in the 1099 Tracking list by default.
If you believe any product based compensation should be reported on a 1099, we recommend discussing this with your tax preparer or 1099 filing provider to determine the correct treatment for your business.
1099-INT
1099-INT
Due January 31 (recommended)
Required for interest payments of $600 or more paid from your checking, savings, or credit card accounts to non financial institution lenders.
1099-MISC
1099-MISC
Due January 31 (recommended)
Required for certain types of non employee payments, including:
Rent payments of $600 or more
Royalty payments of $10 or more
1099-DIV
1099-DIV
Due January 31 (recommended)
Required for dividend distributions of $10 or more made to shareholders.
This applies only if your business is a C Corporation.
Need Help?
If you need assistance reviewing your data or preparing your 1099 list, contact the Support team through chat or at [email protected].