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Those Pesky 1099 Forms - A Survivors Guide

The New Year will be here before you know it, which means one big headache is right around the corner - those darn 1099 forms!

Three years ago, the IRS backed up the filing deadline by an entire month to January 31st, which makes this task even more challenging.

To ease the inevitable stress, here are some helpful hints we call The 1099 Survivors Guide.

The 1099 Survivors Guide

The secret to preparing, filing and managing 1099 forms next January with grace and elegance is advance preparation in December. Here's some of our best ideas:
  1. Who needs a 1099? Pretty much anyone (other than an employee) you pay $600 or more to in a calendar year for services, such as an independent contractor, as well as for the payment of commissions, rent, legal fees, awards and prizes.
  2. Who doesn't need a 1099? If the payee is a corporation (or a LLC that elects to be taxed as a corporation), you do not need to send them a 1099, unless they are a law firm.
  3. How do I know? Send a Form W-9 to any and all payees who might need a 1099. If they are an exempt corporation, they'll let you know when they send back the completed W-9.
  4. Do I really need to send out a W-9 form? The W-9 is super helpful in getting the payee's name, address and tax ID #, all of which you are going to need to prepare the 1099 next January. If you haven't already done so, get those W-9 forms in the mail right away! Here is a link to the most current version of the W-9 - Form W-9.
  5. What is the best way to prepare the 1099? Although you can do them manually by hand, why would you? If you are a QuickBooks user, you can program your software to identify the vendors who need a 1099, and export that information to the paper forms. You can purchase paper forms from most office supply stores, such as Office Depot and Sams Club. If you need help setting this up in QBs, please be sure to give us a call.
  6. If you don’t have QBs or prefer not to prepare your 1099 forms in QBs, one of our favorite alternatives is the Adams Tax Forms Helper Online. The 2019 software is already available at a cost of only $17.99. The software will generate all of your 1099, W-2, 1096 and W-3 forms. For an additional fee, Adams will efile all the forms and mail out the recipient copies. To order the software, click this link - Adams® Tax Forms Helper® Online 2019
  7. Start early. With the compressed January 31st deadline, penalties can pile up fast if you are late. Invariably, a missing Social Security Number or an address change for a payee is going to hold you up. Better to get ahead of this process with a little advance prep and avoid a last minute crisis. Get done what you can early and manage to the exceptions.
Good luck, and let us know how we can be of help.

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