What Therapists Need to Know About 1099s
A Clear Guide for Private Practice
If you’re a therapist in private practice, chances are you didn’t sign up for this career because you were excited about tax forms. Most therapists I work with tell me some version of, “I think I’m supposed to send 1099s… but I’m not really sure who, or when, or how.”
If that sounds familiar, you’re not alone.
And you’re not behind.
Because 1099s aren’t typically covered in graduate programs, it’s completely normal for therapists to feel unsure about when and how to file them. In this guide, I’ll walk you through the basics: what 1099s are, who should receive them, what details you need to collect, and how to file them correctly.
By the end, you’ll have a clearer sense of what’s required and a smoother path for staying compliant in your private practice.
What Is a 1099, Really?
Let’s start simple:
A 1099 is an IRS form that reports money you paid to someone who provided a service to your therapy practice during the year. Think:
Virtual assistant
Billing contractor
Social media or marketing support
Website designer or copywriter
Clinical assistant
Office cleaning person (if they’re not an employee)
For most therapists, the main form you’ll be dealing with is the 1099-NEC.
1099-NEC = “Nonemployee Compensation”
Used when you pay an individual or unincorporated business (like a sole proprietor or partnership) $600 or more during the year for services related to your practice.
There’s also the 1099-MISC, which is used for some other types of payments, like:
Rent
Certain legal fees
Other miscellaneous payments that don’t fall under nonemployee compensation
You may not use the 1099-MISC as often, but it’s helpful to know it exists.
Who Needs a 1099 From Your Therapy Practice?
Here’s the general rule for 1099 requirements for therapists:
You likely need to issue a 1099-NEC if:
The person or business is not your employee
You paid them $600 or more during the calendar year
They are an individual, sole proprietor, or partnership (not an S-Corp or C-Corp)
They provided a service to your practice
Common examples in a therapy practice:
Virtual assistants
Billing specialists
Contract admin support
Marketing or social media freelancers
Website developers
Clinical assistants or other 1099 contractors
Office cleaning services (if they’re not incorporated)
If you’re ever unsure, it’s always okay to ask your accountant to double-check. Feel free to reach out and we can walk through this together to make sure your therapy practice stays compliant.
Who Does Not Need a 1099?
You generally do not need to send a 1099 if:
You paid the vendor by credit card or PayPal (those are reported on a separate form called a 1099-K by the processor)
You paid them less than $600 during the year
They are incorporated as an S-Corp or C-Corp (this is usually indicated on their W-9)
This is why having the right information from your contractors makes things much easier. Which brings us to the next piece.
Collecting W-9s Up Front
Before paying any new contractor, ask for a W-9. It gives you their legal name, address, tax ID, and business type. This will be the information you need when it’s time to prepare 1099s. Gathering this form at the start of the relationship saves you time and stress later, especially when year-end deadlines get close.
How to File 1099s (Without the Stress)
Once you’ve gathered W-9s, totaled what you paid each contractor, and identified who meets the $600 threshold, you’re ready to file. You can use your accounting software’s 1099 feature or a simple third-party e-filing service. Most tools guide you step-by-step, submit the forms to the IRS, and send copies to your contractors. E-filing is the easiest, most organized way to stay compliant without adding extra overwhelm to your year-end.
All 1099-NEC forms are generally due by January 31 each year.
That means:
Forms must be filed with the IRS by that date
Copies must also be sent to your contractors by then
Waiting until late January to start this process can make things feel much more stressful than they need to be. A little planning in the fall or early winter makes a big difference.
There can be penalties for failing to file required 1099s, so staying ahead of this is part of protecting your practice and keeping your bookkeeping clean.
A Few Key Takeaways
If you’re feeling intimidated, I get it. Here is what I want you to remember:
You’re not expected to know all of this intuitively.
Getting W-9s up front and keeping good records makes everything easier.
You don’t have to do this alone, support exists for a reason.
I help therapists every day with staying compliant, organizing their books, and preparing for year-end in a way that feels calmer and more manageable. If you have questions or want guidance on getting started with your own 1099 process, feel free to reach out — I’m here to help make this part of your practice feel clearer and more supported.
Until next time, be well.
Explore My Resources:
💚 YouTube Channel: Practical videos designed to help therapists feel calmer and more confident with their numbers.🌿 Website: Learn more about services, read additional blogs, or schedule personalized support.
