Tax season brings a flurry of deadlines, but one stands out as particularly critical for dental practice owners: Forms 1099-NEC for 2025 must be sent to recipients and filed with the IRS by January 31, 2026. Miss this deadline, and you’re looking at penalties, potential IRS scrutiny, and unnecessary stress that could have been easily avoided.
If you work with independent contractors, consultants, or various service providers throughout the year—and most dental practices do—this deadline applies to you. Let’s break down exactly what you need to know to stay compliant and avoid costly mistakes.
Understanding the $600 Threshold
The rule hasn’t changed, but it’s worth repeating: if your practice paid $600 or more during 2025 to a non-employee individual or unincorporated business for services, you must issue Form 1099-NEC. That longstanding $600 threshold remains firmly in place for 2025 reporting.
Think about the various professionals and service providers you’ve worked with over the past year. That independent dental hygienist who covers your Saturday hours? If you paid them $600 or more, they need a 1099. The marketing consultant who revamped your social media strategy? The IT professional who maintains your practice management software? The handyman who handled emergency repairs? If any of these individuals or unincorporated businesses received $600 or more from your practice in 2025, they’re getting a 1099-NEC from you.
The Attorney Exception You Need to Know
Here’s an important wrinkle that catches many practice owners off guard: payments to attorneys are reportable regardless of their business structure. While you generally don’t need to issue 1099s to incorporated businesses, attorneys are the exception to this rule. Whether your attorney operates as a sole proprietor, through a partnership, or even through a professional corporation, if you paid them $600 or more for legal services, they need a 1099. This applies to that trademark attorney who helped protect your practice name, the employment lawyer who reviewed your associate contract, or any other legal professional you’ve engaged.
The Credit Card Reporting Exception
One of the most common sources of confusion involves credit card payments. Here’s the good news: payments made to vendors by credit card are excluded from 1099-NEC reporting.
Why? The credit card processor is already reporting these payments to the IRS on Form 1099-K. The IRS wants to prevent double reporting of the same income, which would create confusion and potential audit issues for your vendors. This means you only need to track and report payments made by check, ACH transfer, wire transfer, or cash.
This exception can significantly reduce your reporting burden. If you’ve been strategic about using your practice credit card for vendor payments throughout the year, you may have far fewer 1099s to file than you initially thought. However, don’t assume this covers everything—review your payment methods carefully.
The Real Cost of Non-Compliance
Some practice owners wonder whether it’s really necessary to file 1099s for smaller amounts or consider skipping vendors who might not report the income anyway. This is dangerous thinking. Failing to file correct 1099s can trigger penalties that escalate quickly.
The IRS penalty structure for missing or incorrect 1099s depends on how late you file. File within 30 days of the deadline, and you’re looking at penalties per form. Wait longer, and those penalties increase. Intentional disregard of the filing requirement? The penalties jump significantly higher, with no maximum cap.
Beyond the direct financial penalties, non-compliance can trigger broader IRS scrutiny of your practice. An audit examining your 1099 compliance might expand into other areas of your tax return. It’s simply not worth the risk when proper filing is straightforward with the right preparation.
Your Action Plan for Meeting the Deadline
The January 31 deadline is approaching quickly, but you can meet it without stress by taking these steps now:
Review your 2025 vendor payments. Pull reports from your accounting software showing all payments to non-employees. Sort them by payee and payment method to identify who received $600 or more via check, ACH, or cash.
Collect or verify W-9 forms. You should have a completed W-9 on file for every vendor before you make your first payment to them. If you’re missing any, reach out immediately to collect them. The W-9 provides the taxpayer identification number and address you need for accurate 1099 filing.
Don’t make assumptions about exempt payments. When in doubt, ask your CPA. Small payments add up, and you might be surprised to find that a vendor you worked with sporadically throughout the year has actually crossed the $600 threshold.
Coordinate with your dental CPA. Your CPA should handle the actual preparation and filing of your 1099s, but they need accurate information from you. The sooner you provide your vendor payment data and W-9 forms, the smoother the process will be.
Good News on the Horizon
While you still need to meet the January 31, 2026 deadline for 2025 payments, there’s positive news for future years. Beginning with 2026 payments (which you’ll report in early 2027), the threshold rises from $600 to $2,000 and becomes indexed for inflation in future years. This change will dramatically reduce the administrative burden for most dental practices, allowing you to focus on patient care rather than paperwork.
Let Us Handle the Details
1099 compliance doesn’t have to be complicated or stressful, but it does require attention to detail and expertise in dental practice accounting. Working with a CPA who specializes in dental practices ensures nothing falls through the cracks.
Don’t wait until the deadline is breathing down your neck. Contact us today to review your 2025 vendor payments and ensure your 1099-NEC forms are filed accurately and on time. We’ll handle the technical details while you focus on what you do best—providing exceptional patient care.