What is a 1099 contractor?
A 1099 contractor is anyone who works independently rather than for an employer. Independent contractors are often referred to as consultants, entrepreneurs, business owners, freelancers, or self-employed individuals.
This can include Software Developers, Graphic Designers, Videographers, Photographers, Bookkeepers, Accountants, Independent Consultants, Business Coaches, Digital Marketers, and Professional Services. And many more…
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 the payment method you prefer - 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, by January 31st of every year, you must file a 1099 form. This report includes any independent contractor who received payments from you at or above the IRS reporting threshold in the previous year. For the 2025 tax year, the threshold is $600, and for the 2026 tax year, it will be $2,000. Filing this report requires you to have a W-9 form from each one of them. To learn more about how to e-file a 1099 form, please see the following.
We recommend you secure a signed W-9 form from your freelancers and contractors before issuing their first payment. Follow this guide to request a W-9 form from your Vendor in Melio. If you already have their W-9 form, upload a W-9 form to your vendor's details and have it ready in time for the report.
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. To find out more about handling these cases, please see the following guide.
Learn more about what you can pay with Melio.
Melio typically asks for one of the following for verification purposes; Trade License / Business Registration, Doing Business As (DBA) Registration, Previous Schedule C filing, Most recent sales tax filing, Business utility bill under sole proprietor or DBA name, Sole proprietor bank statement.