For an antique mall, the core of the 1099 requirements comes down to one distinction: payments for merchandise are not reported, but payments for services, rent, and certain other items generally are once they reach $600 to a single non-corporate recipient during the year. That means the consignment proceeds you remit to vendors, which are usually the largest checks the mall writes, typically fall outside Form 1099-NEC entirely. The reporting obligations that do apply tend to involve your contractors, your landlord, and your attorneys, not the vendors renting booths from you.
Why Vendor Merchandise Proceeds Are Exempt
The IRS instructions for Forms 1099-NEC and 1099-MISC list “payments for merchandise” among the transactions that do not need to be reported.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) For an antique mall, that exemption covers the bulk of money flowing out the door.
Picture a typical consignment or commission arrangement. A customer buys an item for $1,000, the mall keeps a $200 commission, and $800 goes to the vendor. That $800 is a payment for the vendor’s merchandise, not compensation for a service the vendor performed. You generally do not report it on a 1099-NEC. The vendor still owes income tax on the proceeds, but the reporting falls on the vendor’s own return.
Mall operators who have been issuing 1099-NECs for every vendor above $600 in merchandise sales have likely been over-reporting. Over-reporting won’t trigger penalties, but it creates unnecessary paperwork and tends to confuse vendors who receive forms they weren’t expecting.
When You Must File Form 1099-NEC
Form 1099-NEC covers nonemployee compensation, which means payments for services. If you pay someone who isn’t an employee $600 or more during the year for work performed, you report the total in Box 1 of Form 1099-NEC.2Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Specific Instructions for Form 1099-NEC Common situations for an antique mall:
- An independent bookkeeper or accountant who handles the mall’s finances.
- Repair and maintenance contractors who fix display cases, repair flooring, or maintain the building.
- Freelancers who build your website, run social media, or design advertising.
- Attorneys. Any payment of $600 or more to a lawyer is reported on 1099-NEC regardless of the firm’s corporate structure.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Payments to Attorneys
The $600 threshold is cumulative. Three separate $250 payments to the same handyman add up to $750, which crosses the line. Box 1 captures service payments only; keep merchandise proceeds out of the figure.
When You Must File Form 1099-MISC
The 1099-MISC category most relevant to antique malls is rent. If the mall pays $600 or more in annual rent to a landlord or property owner, that amount goes in Box 1 (Rents) of Form 1099-MISC.4Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Specific Instructions for Form 1099-MISC Note the direction. This applies when the mall pays rent out. It does not apply to booth rental fees your vendors pay you; those are your own rental income, and you don’t issue a 1099 for money you receive.
Prizes and awards of $600 or more go in Box 3 (Other Income). A vendor contest with a cash prize would trigger reporting. Royalties carry a much lower threshold, $10, in Box 2.5Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information Most malls will never deal with royalties, but the low threshold is worth knowing if your business model touches licensing.
Don’t use Form 1099-MISC to report service payments. The IRS split nonemployee compensation back onto Form 1099-NEC specifically to prevent that confusion.
Credit Card and Payment App Payments Shift to the Processor
When a payment runs through a credit card, debit card, or third-party payment network like PayPal or Square, the reporting responsibility moves entirely to the payment settlement entity. Those transactions get reported on Form 1099-K by the processor, not by you on a 1099-NEC or 1099-MISC.6Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Form 1099-K
The rule prevents double-reporting. If you process a vendor’s sales through your point-of-sale system and remit their share through the same card network, the processor handles the 1099-K; you should not also issue a 1099-NEC for those amounts. If you pay the same vendor by both check and credit card during the year, only the check payments count toward the $600 threshold.
The current 1099-K threshold for third-party settlement organizations is $20,000 in gross payments and more than 200 transactions during the calendar year. Legislation enacted in 2025 reinstated this pre-2021 threshold after several years of IRS delays implementing a lower $600 threshold.7Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill Payment card transactions have no minimum and are always reported by the processor.
Collecting W-9s and Backup Withholding
Before you pay any contractor, service provider, or landlord, collect a completed Form W-9. The W-9 captures the recipient’s legal name, business name, tax classification, address, and Taxpayer Identification Number, either an SSN or EIN.8Internal Revenue Service. Form W-9 (Rev. March 2024) Request for Taxpayer Identification Number and Certification Collecting it upfront saves work in January. Chasing people for tax information after the fact is the most common reason mall operators miss filing deadlines.
If a payee refuses to provide a W-9 or gives an obviously incorrect TIN, you must withhold federal income tax at a flat 24% from all payments to them. This is backup withholding, and it is not optional.9Internal Revenue Service. Instructions for the Requester of Form W-9 – Purpose Withheld amounts get remitted on Form 945, due by January 31 of the following year.10Internal Revenue Service. Instructions for Form 945 (2025) If the total withheld for the year is under $2,500, you can pay it with the return. Above that, you make periodic deposits through the Electronic Federal Tax Payment System.
The IRS runs a free TIN Matching program that lets you verify name-and-TIN combinations before filing. It’s worth using if you have more than a handful of payees, because catching a mismatch before submission avoids the penalty for an incorrect return.11Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
Corporate Vendors Are Generally Exempt
You generally do not issue a 1099 to a vendor organized as a C-corporation or S-corporation. The W-9 tells you the entity’s tax classification, which is why collecting it before the first payment matters. Sole proprietors, single-member LLCs taxed as sole proprietorships, and partnerships all require 1099 reporting when the threshold is met.12Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Reportable Payments to Corporations
The corporate exemption has one notable exception. Payments of $600 or more to a law firm for legal services are reported on Form 1099-NEC even if the firm is incorporated.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Payments to Attorneys
Filing Deadlines
Form 1099-NEC has a single deadline: January 31 of the following year, for both the recipient copy and the IRS copy. Paper or electronic, the date is the same.13Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – When To File
Form 1099-MISC gives you more room on the IRS side. Recipient copies are due January 31, but the IRS copy is due February 28 for paper filers or March 31 for electronic filers.13Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – When To File
If your business files 10 or more information returns in total during the year, you must file electronically. The count aggregates all return types, so four W-2s and six 1099s puts you at the threshold.14Internal Revenue Service. E-file Information Returns Most malls with a meaningful number of contractors and a landlord hit it. The IRS offers free electronic filing through its IRIS Taxpayer Portal, which any business can use to file 1099-series returns at no cost.15Internal Revenue Service. File Form 1099 Series Information Returns for Free Online
Penalties for Late or Wrong Returns
The IRS charges separate penalties for failing to file correct returns with the IRS and for failing to furnish correct statements to recipients. For 2026 returns, the per-form penalty scales with how late you file:16Internal Revenue Service. Information Return Penalties
- Corrected within 30 days: $60 per return.
- Filed after 30 days but by August 1: $130 per return.
- Filed after August 1 or not filed: $340 per return.
- Intentional disregard: $680 per return with no maximum cap.
Small businesses (average annual gross receipts of $5 million or less over the prior three years) have lower annual caps. The intentional-disregard penalty has no ceiling at any size. Penalty abatement is available if you can show reasonable cause, which weighs whether you acted responsibly before and after the failure.16Internal Revenue Service. Information Return Penalties
If you discover an error after filing, submit a corrected return promptly. One trap on paper corrections: do not check the “VOID” box on a corrected form. Marking it void tells the IRS to delete the record rather than replace it with the corrected version.17Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Corrected and Void Returns
State Filing Is Often a Separate Step
Federal filing doesn’t always cover your state. The IRS runs a Combined Federal/State Filing Program that forwards certain 1099 forms to participating states. Form 1099-MISC is included; Form 1099-NEC is not.18Internal Revenue Service. Combined Federal/State Filing Program (CF/SF) PIA Report If your state requires 1099-NEC reporting, you likely need to file directly with the state tax department using Copy 1 of the form.19Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – State Information Requirements vary. Some states require nothing; others have their own portal and their own deadlines. Check with your state’s department of revenue in advance.
How Long to Keep the Records
Retain copies of all filed 1099s, signed W-9s, and supporting payment records for at least three years after the filing date, which is the general statute of limitations for IRS audits. Extend to six years if you suspect any underreporting that exceeds 25% of gross income.20Internal Revenue Service. How Long Should I Keep Records Keeping everything for four years is a safer habit, since the three-year clock runs from the filing date rather than the tax year. Hold W-9s for as long as you do business with the payee and for at least four years after the last return referencing their TIN.