The 1099 requirements for an antique mall turn on one distinction: money you pay a vendor for their merchandise is not reportable, but money you pay someone for services generally is once it hits $600 for the year. Most of what flows out of a mall to its booth vendors is consignment proceeds, which the IRS explicitly excludes from 1099-NEC and 1099-MISC reporting. The forms you actually need to worry about are the ones covering your service providers, your landlord, and a few other narrow categories.
Why Vendor Consignment Payments Are Exempt
The IRS instructions for Forms 1099-NEC and 1099-MISC list payments for merchandise among the transactions that don’t need to be reported.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) In a standard antique mall arrangement, a customer buys an item for $1,000, the mall keeps a $200 commission, and the vendor gets $800. That $800 pays for goods the vendor supplied. It is not compensation for services, and it does not go on a 1099-NEC.
The vendor still owes income tax on those proceeds. The reporting obligation just sits with them, on their own return, rather than with the mall. If you’ve been issuing 1099-NECs to every booth vendor who cleared $600 in sales, you’ve been doing paperwork you don’t owe. Over-reporting won’t get you penalized, but it confuses vendors and clutters your records.
Payments That Do Require a 1099-NEC
Form 1099-NEC covers nonemployee compensation, meaning payments for services. If you pay a non-employee $600 or more during the year for work performed for the mall, the total goes in Box 1.2Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Specific Instructions for Form 1099-NEC The kinds of payments that come up in a typical mall:
- An outside bookkeeper or accountant who handles the mall’s finances.
- Independent contractors who repair display cases, fix flooring, or maintain the building.
- Freelancers who build your website, run social media, or design ads.
- Attorneys, at any amount of $600 or more, regardless of how the firm is organized.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Payments to Attorneys
The $600 threshold is cumulative. Three $250 payments to the same handyman during the year add up to $750 and cross the line. Only service payments go in Box 1. Never mix merchandise proceeds into that number.
Payments That Require a 1099-MISC
The 1099-MISC category most likely to apply to an antique mall is rent. If the mall pays $600 or more in annual rent to a landlord, that amount goes in Box 1 (Rents).4Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Specific Instructions for Form 1099-MISC Note the direction. This is rent you pay out. The booth fees your vendors pay you are your rental income; you don’t issue a 1099 for money you receive.
Prizes and awards of $600 or more go in Box 3. A cash prize in a vendor contest would trigger reporting. Royalties have a much lower threshold at just $10 and go in Box 2.5Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information Most malls will never touch royalties, but the low threshold matters if licensing is part of your model.
Don’t use 1099-MISC for services. The IRS created the separate 1099-NEC to keep those payments off this form.
Credit Card and Payment App Transactions
When you pay a vendor or contractor through a credit card, debit card, or a third-party network like PayPal or Square, the payment processor reports the transaction on Form 1099-K. You don’t also report it on a 1099-NEC or 1099-MISC.6Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Form 1099-K This prevents the same dollars from being reported twice.
If you pay the same person by both check and credit card during the year, only the check portion counts toward the $600 threshold. The current 1099-K threshold for third-party settlement organizations is $20,000 in gross payments and more than 200 transactions during the calendar year, restored to the pre-2021 level by legislation enacted in 2025.7Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill Actual credit and debit card transactions have no minimum threshold and are always reported by the processor.
Collecting W-9s and Backup Withholding
Before you pay anyone who might need a 1099, get a completed Form W-9. It captures the recipient’s legal name, business name, tax classification, address, and Taxpayer Identification Number.8Internal Revenue Service. Form W-9 (Rev. March 2024) Request for Taxpayer Identification Number and Certification Chasing this information down in January is how mall operators miss deadlines.
If a payee refuses to provide a W-9 or gives you a TIN that’s clearly wrong, you’re required to withhold 24% of their payments as backup withholding.9Internal Revenue Service. Instructions for the Requester of Form W-9 – Purpose You send those withheld amounts to the IRS on Form 945, due by the end of January the following year.10Internal Revenue Service. Instructions for Form 945 (2025) Under $2,500 for the year, you can pay it with the return; above that, you deposit through EFTPS.
The IRS also runs a free TIN Matching program that lets you check a name-and-TIN combination before you file. Worth using once you have more than a few payees on the list.11Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
Corporate Vendors and the Attorney Exception
You generally don’t issue a 1099 to a C-corporation or S-corporation. The W-9 tells you which recipients are incorporated. Sole proprietors, single-member LLCs taxed as sole proprietorships, and partnerships all require reporting when the threshold is met.12Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Reportable Payments to Corporations
Attorneys are the exception. Legal payments of $600 or more get a 1099-NEC even when the firm is incorporated.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Payments to Attorneys
Filing Deadlines and When You Must E-File
Form 1099-NEC has one deadline for everything: January 31 of the following year, for both the recipient copy and the IRS copy, paper or electronic.13Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – When To File
Form 1099-MISC gives you a little more time on the IRS side. Recipient copies are still due January 31, but the IRS copy is due February 28 on paper or March 31 electronically.13Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – When To File
If your business files 10 or more information returns in total during the year, you must file electronically. The count aggregates across return types, so four W-2s and six 1099s put you at the threshold.14Internal Revenue Service. E-file Information Returns Most malls with a real vendor roster hit this easily. The IRS’s free IRIS Taxpayer Portal handles any 1099 series form at no cost, with data entry or template upload and filing confirmation within 48 hours.15Internal Revenue Service. File Form 1099 Series Information Returns for Free Online Set up your Transmitter Control Code well before January.
Penalties for Late or Incorrect Filing
The IRS charges per-form penalties that escalate the longer you wait. For 2026 returns:16Internal Revenue Service. Information Return Penalties
- Corrected within 30 days: $60 per return.
- Filed after 30 days but by August 1: $130 per return.
- Filed after August 1 or not filed: $340 per return.
- Intentional disregard: $680 per return, no maximum cap.
Small businesses with average annual gross receipts of $5 million or less over the prior three years have lower annual caps. Intentional disregard has no ceiling at any size. Penalty abatement is available if you can show reasonable cause; the IRS looks at whether you acted responsibly before and after the failure. A vendor who supplied a bad TIN despite your diligent W-9 collection makes a stronger case than a missed calendar reminder.
If you find an error on a return you’ve already filed, submit a corrected version. One common paper-filing mistake: don’t check the VOID box on a correction. Marking it void tells the IRS to delete the record entirely instead of replacing it.17Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – Corrected and Void Returns Catching an error within 30 days keeps the penalty at $60 rather than $340.
State Filing Is Separate for 1099-NEC
The IRS runs a Combined Federal/State Filing Program that forwards certain forms to participating states automatically. Form 1099-MISC is in the program. Form 1099-NEC is not.18Internal Revenue Service. Combined Federal/State Filing Program (CF/SF) PIA Report If your state requires 1099-NEC reporting, you’ll need to file a copy directly with your state tax department using Copy 1.19Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025) – State Information Requirements and deadlines vary. Check with your state’s department of revenue in the fall so a separate portal and due date don’t surprise you in January.
Recordkeeping
Keep copies of filed 1099s, signed W-9s, and supporting payment records for at least three years after the filing date, which is the general statute of limitations for IRS audits.20Internal Revenue Service. How Long Should I Keep Records Four years is a safer habit, since the clock runs from the filing date rather than the tax year. Hold on to a vendor’s W-9 as long as you’re doing business with them, and for at least four years after the last return that references their TIN.