What is a 1099 vendor?
A 1099 vendor 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, Professional Services, and many more.
Can I use Gusto Bill Pay to pay them?
Yes! 1099 vendors are vital to growing your business. Gusto Bill Pay is the perfect solution to pay them quickly and easily.
Learn more about paying your vendors here.
To comply with IRS regulations, by January 31st of every year, you must file a 1099 form. This report includes any vendor 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.
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 Gusto Bill Pay. 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 Gusto Bill Pay (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 Gusto Bill Pay 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 Gusto Bill Pay.
Gusto Bill Pay typically asks for one of the following for verification purposes: Trade License / Business Registration, Doing Business As (DBA) Registration, Previous Schedule C igor.portnov@melio.comfiling, Most recent sales tax filing, Business utility bill under sole proprietor or DBA name, or Sole proprietor bank statement.