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PostHeaderIcon 1099 Tips – It’s That Time of Year

For a tax professional, the beginning of year tax season is broken up into stages.  The one that not a lot of people know about (especially if they don’t own their business) is that first month of the year.  If you do payroll, W-2s have to go out as do 1099s.  If you’re small business (or a new CPA who’s never done 1099s before), here are a few tips to make things easier.

The first thing you should have been doing is collecting W-9s.  This form has been revised recently and it gives you all the information you need to both determine whether a company should be sent a 1099-MISC as well as all of the information to prepare the 1099-MISC.  Anytime you pick up a new vendor, it’s a good idea to get a W-9 from them.

Of course this is the end of the year so if you’ve gone an entire year without collecting 1099-MISC’s, it’s time to do some work.  You should reach out to all of your vendors asking them to fill out the form.  Some won’t send them back but others will especially the ones you’re still doing business with.

The next step is figuring out how much you paid each vendor.  If you’re using something like Quickbooks and you’re using it effectively, then this shouldn’t be a problem. Just print out a report of payments made to each vendor.  That’s the one thing you need (the amount paid) that isn’t on the W-9.

As far as preparing the forms, if you have Quickbooks, you can do 1099s within that program (you’ll need to buy forms from Intuit though).  I do some 1099s so I’m still using off the shelf forms from OfficeMax.  Within the forms package, you can get software that’s easy to use and best of all, if you use it from year to year, you can carry over the information from a prior year so you don’t need to replicate a lot of work.

One last suggestion, do something here.  If you haven’t kept up with your 1099s and five of your 50 vendors sent them back, go ahead and send those five a 1099.  Doing something is better then doing nothing.