W-9s and 1099s for Dental Practices: How to Stay IRS Compliant

October 23, 2025

As the fall season settles in, this final quarter is the perfect time to reflect on your practice’s progress and get your books in order before the year ends.

Make sure your dental practice does not overlook payments to independent contractors and their tax reporting requirements. Proactively managing this aspect of your records helps ensure compliance and avoids unnecessary disruptions during tax season.

Who Needs a 1099 in 2025?

In your dental practice whenever you pay an individual or unincorporated business (sole proprietor or partnership) $600 or more during the year for services, such as consulting, cleaning, repairs, or other non-employee work, you generally are required to issue a Form 1099 NEC.

Here are some important reminders to keep in mind:

• Payments made by credit card or third-party apps, for example PayPal or Stripe, are reported by the payment processor rather than by your practice.
  
  
• Payments to S-corporations generally do not require a 1099 NEC, unless the payment was for attorney fees or medical/healthcare services, where different rules apply.
  
  
• While the threshold remains at $600 for tax year 2025, new legislation known as the One Big Beautiful Bill Act, passed July 4, 2025, will raise the threshold to $2,000 starting tax year 2026, and then adjust for inflation beginning in 2027.
  
  

The W 9, Start Here

Before you can issue a 1099 NEC, you’ll need each contractor to complete a Form W 9, which captures their legal name, business name if applicable, address and taxpayer identification number SSN/EIN.

Here’s a proactive steps for you to take now:

• Review your vendor and contractor payments for the whole year.
  
  
• Identify any individual or unincorporated business paid $600 or more for services.
  
  
• Request a completed W 9 from each contractor who does not already have one on file.
  
  
• Save the W 9s securely and forward all completed ones to your CPA so they can prepare the 1099s accurately.

Having W 9s ready now will make your January filing much smoother and reduce the risk of missing or incorrect filings.

Why Compliance Still Matters for Dental Practices

Properly handling contractor reporting helps protect your practice from potential penalties. The IRS can assess penalties for late or incorrect forms.

By staying ahead of contractor reporting you:

• Keep your practice’s administrative and financial systems clean and updated.
  
  
• Avoid last-minute scrambling in January when tax season overlaps with practice operations.
  
  
• Give your accounting team the time and accurate data they need to file correctly.
  
  

Stay Ahead and Simplify January

Taking care of contractor reporting now means fewer surprises when year-end arrives. A few proactive steps this fall will help your private dental practice remain organized, compliant and focused on serving patients and growing the practice.

Not sure where to start? Contact us today!