Year-End 1099 Compliance Services: Simplify Your 1099 Filing Process

Note from Donna… November is here and that means my team goes into Year End mode. One of the first things we start to work on is 1099s. Yes, we know most business owners despise this part of compliance work. Part of the value our clients get from us is processing 1099s; however, for us to process we need to collect all those wonderful W9s. My rule of thumb is to collect a W9 from someone I am contracting work out too no matter how much I’m paying them. In this way, people know up front that you will process a 1099 if they cross the threshold.

Every year I have clients that are really confused about 1099s which is completely understandable. Let’s face it – they are confusing. Let’s see if I can clear a few things up.

First, let’s understand that 1099 season is twofold. When we talk to our clients about 1099s it is easy to get confused since we may be talking about the ones you send out or we may be talking about the ones you receive. We as bookkeepers need to process both. We need to help you be compliant by sending them out to your independent contractors, landlords, and attorneys. You may also be receiving them, and we need to reconcile your books to them.

To further complicate things, the IRS changed the forms. We use a 1099Misc to report rent, other income, interest income and attorney fees. We use a 1099NEC to report payments made to an independent contractor. Oh wait, we report that if you have paid by check, cash or sometimes 3rd party apps like Venmo. However, if you paid by credit card, they would get a 1099K from their merchant service provider, so you don’t send it out.

1099Misc

Rent - Other Income - Attorney Fees

1099NEC

Independent Contractors

There are rules about who gets a 1099. If they are a sole proprietor – Yes. If they are a S or C corporation – No. If they are a LLC, well that depends on how they fill out the W9.

As you can see, there is a lot of “if this then that” scenarios regarding 1099s. This is why we provide this priceless service to our clients. November is the month we start gathering the list for our clients. We need them to collect those valuable W9s, which gives us information about your vendors.

Do you need help with 1099s? Is 1099s one big messy compliance issue that you dread each year? Call us for help!