Get Ahead on 1099s and W-9s for a Stress-Free Year-End

Time to Tackle Your 1099s: End-of-Year Prep

A Note from Donna (by Larissa)...

As the year winds down, it’s time to shift focus to crucial financial tasks like preparing your 1099s, W-9s, and other important records tailored to your business. Let's dive into why getting ahead on 1099s is so important for a smooth year-end.

Why Start Now?

As the year comes to a close, it’s easy to get caught up in the holiday rush. But as festive as this time can be, don’t forget that tax season is just around the corner. If you don’t want to deal with the stress of last-minute filings, now is the perfect time to start preparing your 1099s.

Waiting until the deadline is looming makes the process more stressful and time-consuming. When you’re rushing, you’re also more likely to face costly penalties for late or incorrect filings. While these penalties might seem small at first glance, they can add up quickly. To avoid this, it’s best to get organized now and work closely with your accountant to ensure everything is in order.

Simplifying the Process

To ensure a hassle-free experience, keep your financial records organized throughout the year. Receipts, invoices, payments, and detailed vendor information are essential for a smooth filing process. When it comes to 1099s, the most important data includes vendor names, contact details, and taxpayer identification numbers (TINs). The more organized your information, the faster your accountant can get everything filed.

A well-prepared 1099 process can save you from a lot of unnecessary stress at year-end. Your accountant can help you identify who needs to receive a 1099, making the whole process more efficient.

Who Needs to Receive a 1099? When preparing your 1099s, you’ll need to account for all independent contractors, freelancers (including those from platforms like Upwork), attorneys, and small-to-medium-sized businesses that you’ve paid more than $500 over the course of the year. It’s your accountant’s job to properly categorize these payments, but double-checking everything is always a good idea to catch any potential errors.

The Role of W-9s A critical part of 1099 preparation is having W-9 forms on file. These forms, which you should request from vendors and contractors when you begin working with them, provide essential information like names, addresses, and TINs. Without W-9s, completing your 1099s becomes much more complicated, so gathering these early is a must.

Profit First and Tax Preparation

Ensure a smooth tax season with Profit First! Stay prepared, review allocations, and organize 1099s early to minimize stress and streamline next year.