What is a W-9 Form?
A W-9 form is an Internal Revenue Service (IRS) tax form that provides a vendor's Taxpayer Identification Number (TIN) to you when you pay them. The form is used to capture the following information:
- Used to collect accurate tax information from your independent contractor and freelancer vendors.
- Contains your vendor's legal name, business name, and tax classification.
- This information helps you report payments made to vendors to the IRS.
We recommend you secure a signed W-9 form from your freelancers and contractors before issuing their first payment.
To learn more about requesting W-9 forms from your vendors, please see the following guide.
Do you already have a W-9 form from your vendor? To find out how to upload a completed W-9 form, please see this guide for instructions.
Suppose you have paid a 1099 vendor less than the IRS reporting threshold through Melio (for the 2025 tax year, the threshold is $600, and for the 2026 tax year, it will be $2,000) but also paid them an additional amount outside of Melio for a combined total that meets or exceeds the threshold. In this case, you must still request a W-9 form from them. For more information on handling these vendors, please see the following guide.
What is a 1099 Contractor?
A 1099 contractor is a self-employed individual or business that provides services to another company. 1099 Contractors are:
- Not a regular employee
- Paid per project or service
- Responsible for their own taxes
- Typically works with multiple clients
- Receive their payments without their taxes being withheld
Can I use Melio to pay them?
Yes! Freelancers and contractors are a vital part of growing your business. Melio is the perfect solution to pay them quickly and easily. Plus, you can pay them both domestically and internationally.
Choose your preferred payment method - ACH bank transfer, credit card, or debit card. Then, your contractors and freelancers choose how they’d like to receive the payment: via paper check or ACH bank transfer. They don’t even need a Melio account to accept it.
To comply with IRS regulations, you must file a 1099 report by January 31st of every year*. This report includes any independent contractor who received an amount equal to or more than the IRS reporting threshold from you in the previous year. For the 2025 tax year, the threshold is $600, and for the 2026 tax year, it will be $2,000.
*Please see the IRS website for further information.
Understanding 1099 Forms
1099 forms are IRS documents that report various types of income outside of standard wages. These forms are filed with the IRS each tax year, and copies are sent to contractors.
Who Receives a 1099?
- Independent contractors
- Freelancers
- Consultants
- Self-employed professionals
When is a 1099 Issued?
You must issue a 1099 form if you paid an independent contractor or 1099 contractor an amount that meets or exceeds the IRS reporting threshold. For the 2025 tax year, the threshold is $600, and for the 2026 tax year, it will be $2,000.
Types of 1099 Forms
- 1099-NEC: For reporting non-employee compensation*
- 1099-MISC: For miscellaneous income like rent or royalties*
*Please see the IRS website for further clarification.
Best Practices for Vendor Payments
1 - Collect the W-9 form before the first payment
2 - Verify vendor information
3 - Keep accurate records
4 - Issue 1099 forms by January 31st following the tax year*
* Please see the IRS website for further clarification.
Unlimited, Boost, and Core users can easily e-file 1099 forms using Melio’s sync with Tax1099*. To learn more about this, please see our 1099 e-filling with Tax1099 guide.
* Standard Tax1099 fees apply
If you are a Go user and wish to use this service, upgrade your plan to sync with Tax1099.