Need a speedy refresher on 1099s? Look no further!
Quick Facts:
Forms 1099 must be issued by January 31st (and filed with the IRS too!)
1099s go to any individual and some businesses you paid more than $600 for services during the years (think clinician contractor, virtual assistant, marketing, website person, supervisor, accountant, attorney, etc)
This $600 threshold excludes payments made by credit card, debit card, or third party systems like Paypal
Corporations don’t need to receive a 1099
Lawyers always need to be issued a 1099, even if they are a Corporation
You will need a Form W-9 from all of your 1099 workers
Why do you need a Form W-9 from your worker or service vendor?
The W9 will have all the info you need to issue a 1099, like current address, legal name and social security number. It will also let you know what type of entity they are. (See Corporation & Lawyer bullet points above!)
Best Practices:
BEFORE you pay a new service vendor, ask them for a W9. Securing a W9 at the time of payment completely eliminates a year end scramble.
Enter vendor names on ALL transactions in your accounting software as they happen. Accounting software will track 1099 totals, but only if the vendor name has been entered. Save yourself from a miserable year end memory game of who paid what, when, how much, and to whom and let your accounting software do the work for you!
And now you’re up to speed for a great 1099 season. (Stop the timer!)
