how to generate a 1099 form

Generating a 1099 as a Business (Payer Side)

If you paid a contractor, freelancer, or vendor $600 or more during the tax year, you're generally required to issue a 1099-NEC. The process is straightforward once your bookkeeping is clean, but it depends on having accurate payee data collected upfront.

Start by confirming you have a completed W-9 for every contractor — this gives you their legal name, business type, and Taxpayer ID Number (TIN). Without it, you can't file correctly. Then pull total payments made to that contractor for the calendar year from your accounting software.

• •Collect a signed W-9 from each contractor before paying them.
• •Total payments per vendor from your books (cash and check payments count; card/PayPal payments are typically reported by the processor, not you).
• •Use an IRS-authorized e-file provider or your accounting software's built-in 1099 module to generate the form.
• •File Copy A with the IRS and the applicable state, and send Copy B to the recipient — verify current deadlines each year, as they can shift.
• •Keep a copy in your records for at least four years in case of an audit.

Understanding Your 1099-K as an Amazon Seller

If you sell on Amazon, you won't generate a 1099-K yourself — Amazon issues it to you as a payment processor reporting your gross unadjusted sales. The threshold for who receives one has been in flux. The IRS 1099-K reporting threshold for third-party platforms has been changing in recent years and is being phased rather than fixed at the old $20,000/200-transaction level, so don't assume last year's rule still applies — check the current year's threshold directly with the IRS.

The number on your 1099-K is gross sales before Amazon fees, refunds, or shipping are deducted — it is not your taxable income. This trips up a lot of sellers who report the 1099-K figure directly on their tax return instead of reconciling it against actual net revenue.

Given that third-party sellers account for more than half of physical gross merchandise sold on Amazon, the IRS and state tax authorities have increasingly focused enforcement on marketplace income, making accurate reconciliation more important than ever.

Reconciling 1099-K Numbers Against Your Books

Because the 1099-K reflects gross transaction volume, your job is to bridge that number to net taxable income. That means backing out Amazon referral fees, FBA fees, refunds, promotional discounts, and reimbursements — and separately accounting for any sales tax Amazon collected on your behalf.

This is where marketplace facilitator laws matter. Since nearly all U.S. states with a sales tax now have marketplace facilitator laws requiring platforms like Amazon to collect and remit sales tax on third-party sales, the sales tax portion of your 1099-K gross figure typically isn't your liability to remit — but you still need to document it clearly in case of an audit, especially in states where economic nexus rules (post-Wayfair) apply differently to non-marketplace sales.

Reconciliation gets more complex when FBA reimbursements are involved. Since 2025, Amazon reimburses lost or damaged inventory based on your manufacturing/sourcing cost rather than retail price, which changes how those credits should hit your books versus how they show up in transaction reports. Getting this level of detail right by hand in a spreadsheet is where most sellers lose hours — Amazon accounting software that syncs to QuickBooks & Xero automates the fee, refund, and reimbursement breakdown so your books match what actually happened, not just what the 1099-K implies.

Whether you're issuing 1099s to contractors or reconciling the one Amazon sends you, the core discipline is the same: don't file or report a number until you've traced it back to source transactions.