Do Accounting Firms Get a 1099? Corporate Exemption and LLC Rules

Accounting firms get a 1099-NEC from you only when two things are true: you paid the firm $600 or more during the year for services connected to your trade or business, and the firm is not organized (or taxed) as a corporation. Sole proprietors, partnerships, and LLCs taxed as sole proprietors or partnerships get a 1099-NEC. C-corporations, S-corporations, and LLCs that have elected to be taxed as either kind of corporation do not, regardless of how much you paid them.¹

The way to know which situation you are in is to collect a Form W-9 from the firm before you pay them. The firm’s answer on that form tells you whether a 1099-NEC is required.

When the $600 Threshold Applies

Reporting only applies to payments made in the course of a trade or business. If your business pays an accounting firm $600 or more in a calendar year for bookkeeping, an audit, tax preparation, or similar work, you are on the hook for a 1099-NEC unless a specific exemption applies.² The $600 is cumulative across the year, not per invoice.

Personal payments are outside the rule. If you hire an accountant to prepare your individual return and the work has nothing to do with a business, no 1099-NEC is required.³ The obligation belongs only to payers operating for gain or profit.

Watch out for reimbursed expenses. If you reimburse a firm for travel or other costs and the firm does not account for those expenses back to you, the reimbursement counts as compensation and gets added to the running total toward $600.²

The Corporate Exemption

Federal regulations exempt payments to corporations from 1099-NEC reporting.¹ If your accounting firm is a C-corporation or an S-corporation, you do not file a 1099-NEC even for large sums. Many mid-size and larger accounting firms are organized this way, and the exemption exists because corporations report their income directly through their own returns.

One boundary matters here. The corporate exemption does not cover payments for legal services. If a bill from your accounting firm includes attorney fees (some firms employ attorneys or offer legal work), the legal-services portion of $600 or more is still reportable on a 1099-NEC even though the accounting portion is exempt.² Pure accounting and bookkeeping work from a corporation stays exempt.

How an LLC’s Tax Classification Changes the Answer

LLCs are where most people get tripped up. “LLC” on the invoice or business card tells you nothing about 1099 status; what matters is how the LLC elected to be taxed. There are four possibilities, and each one produces a different result:

Single-member LLC treated as a disregarded entity. Same treatment as a sole proprietor: file a 1099-NEC if payments reach $600.
Multi-member LLC treated as a partnership. File a 1099-NEC if payments reach $600.
LLC that has elected S-corporation status. Treated as a corporation. Exempt.
LLC that has elected C-corporation status. Treated as a corporation. Exempt.²

There is a small twist for single-member LLCs. When a disregarded-entity LLC fills out a W-9, it should list the owner’s name and the owner’s SSN or EIN for income tax reporting, not the LLC’s own EIN.⁴ If a single-member LLC accounting firm hands you a W-9 with the LLC’s EIN, ask for a corrected one before you file.

Payments by Credit Card or Payment App

If you paid the firm by credit card, debit card, PayPal, Venmo, or another third-party payment network, you do not report those payments on a 1099-NEC even if they exceed $600.² The payment processor handles those transactions on Form 1099-K. Federal regulations put the reporting duty on the payment settlement entity, not on you.⁵

This is true even if the firm’s card-and-app volume falls under the 1099-K threshold and the firm never actually receives a 1099-K. The current 1099-K threshold reverted to $20,000 and more than 200 transactions under the One, Big, Beautiful Bill, but that has no effect on your 1099-NEC obligation.⁶ Card and app payments are simply off the 1099-NEC ledger.

In practical terms, only check, cash, wire, ACH, and similar direct payments count toward the $600 threshold. If you paid the same firm partly by check and partly by credit card, only the check portion counts.

Using Form W-9 to Confirm Status

Form W-9 is how you find out which bucket the firm falls into. Ask for a completed W-9 before you make the first payment. It gives you the firm’s legal name, taxpayer identification number, and federal tax classification.⁷

Line 3a is the box that matters. Read it this way:

Individual/sole proprietor or single-member LLC: file a 1099-NEC at $600.
Partnership: file a 1099-NEC at $600.
LLC with tax classification P (partnership): file a 1099-NEC at $600.
C-corporation or S-corporation: no 1099-NEC.
LLC with tax classification C or S: no 1099-NEC.

Keep the W-9 on file. If the IRS ever asks why you did not send a 1099-NEC to a particular firm, the W-9 is your evidence that the firm claimed corporate status.

What Happens If the Firm Won’t Give You a TIN

If the firm refuses to complete a W-9, provides no TIN, or gives a TIN that the IRS later says does not match its records, you have to withhold 24% of each payment and send it to the IRS. This is backup withholding, and it applies to any payment that would otherwise be reported on a 1099-NEC.⁸

Two things can trigger it. A W-9 that comes back with a missing or clearly wrong TIN puts you into withholding immediately. Separately, the IRS may send you a CP2100 or CP2100A notice listing payees whose name-and-TIN combinations do not match. When that happens, you send the payee a “B” notice and begin withholding within 30 business days if they do not respond.⁹ Amounts you withhold are reported on Form 945.¹⁰

Deadline and How to File

The 1099-NEC has to reach the IRS and the accounting firm by January 31 of the year after the payments were made.¹¹ There is no automatic extension for the 1099-NEC; extensions require a paper Form 8809 with a written justification and are granted only for narrow reasons.¹²

If you file 10 or more information returns during the year in total (W-2s, 1099-MISCs, and 1099-NECs combined), you must file electronically.¹³ The IRS offers two free systems for this: IRIS, a web portal that accepts keyed entries or CSV uploads, and FIRE, a bulk-filing system for higher volumes. Late or missing forms carry per-form penalties that scale with how late you file and can climb sharply for intentional disregard, so the cheapest move is to collect the W-9 early and file on time.¹⁴

1
eCFR. 26 CFR 1.6041-3
2
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025)
3
Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return?
4
Internal Revenue Service. Single Member Limited Liability Companies
5
eCFR. 26 CFR 1.6041A-1
6
Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
7
Internal Revenue Service. Form W-9 (Rev. March 2024)
8
Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide
9
Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice
10
Internal Revenue Service. Instructions for Form 945
11
Internal Revenue Service. Form W-2 and Other Wage Statements Deadline Coming Up for Employers
12
Internal Revenue Service. Form 8809 (Rev. December 2025)
13
Internal Revenue Service. E-file Information Returns With IRIS
14
Internal Revenue Service. Information Return Penalties