If you’re gearing up for the upcoming 1099 filing season, you probably understand the nuances of this common form. If you’re a payroll specialist, you know that 1099s are sent to all vendors who received more than $600 in payment during the calendar year. If you’re a small business owner, you probably know that you’ll be working from W-9 forms when preparing the 1099s. If you’re an in-house accountant, you understand that the payment method may influence the type of 1099 form you fill out. If you have anything to do with tax preparation and filing, you likely have all the resources you need, as well as a personal, preferred process.
That said, you might need a refresher on how to organize and execute end-of-year filing tasks, especially with an ever-increasing amount of 1099 labor. Whether you’re a business owner or payroll specialist, this overview will refresh your memory and get you started on the process.
Important Deadlines
Remember that Form 1099-MISC must be filed with the IRS by January 31 for the previous calendar year. The deadline is the same for both paper filing and e-filing. To that end, 1099s are also due to contract workers by January 31.
Audit Your Records
Before sitting down with your 1099 forms, you’ll need to audit your records. In the simplest terms, this means compiling receipts and verifying vendor transactions against your bank feed. Assemble all documents from vendor transactions, including any W-9 forms. It’s also a good idea to check with each contractor to ensure their information is up to date, especially if you’re filing for vendors employed toward the beginning of the calendar year.
Auditing your records is easier with an accounting software like AMS. This tool will allow you to pull transaction lists by vendor, providing you with accurate and up-to-date information on the contractors you have used during the year. The process is simpler and easier than trying to manually audit your records, which nearly always includes misplaced paper receipts and unorganized filing cabinets.
Tally Required Information
To correctly fill out a 1099, you will need to maintain accurate records of all the vendors you’ve utilized over the course of the year. Most of the personal information, like the Tax ID Number and address, will come from the W-9 form a vendor will complete prior to providing services. Here’s a checklist of information you’ll need prior to completing the 1099.
- Tax ID Number
- Business or Individual’s Name
- Mailing Address
- Capital amount involved in the transaction
Finding the Taxpayer ID
If the taxpayer ID is missing, try contacting the contractor directly to obtain the information. If you cannot reach them, keep track of the attempts made, including emails and mailings. This will protect you from fines and penalties when the IRS inevitably contacts you. File the 1099-MISC on time, but include zeros in the space where the taxpayer ID is required.
Get Your 1099s
Once you have accurate information to use, it’s time to secure your 1099s. If you are filing with paper, you must use specific forms that are readable by the IRS scanner. These forms are available to order from the IRS, both online and via telephone (1-800-TAX-FORM). If you are filing electronically, you can use software to create distribute and file your 1099 forms online.
AMS Tools Can Help
In a time when most employers utilize contracted work, accounting software is essential for quick and painless 1099 filing. The W2 and 1099 Software Filer, our base program, is a complete database system that generates all 1099 (and W-2) forms. It is easy to use, has a menu-driven format, and simplifies the selection of payers and forms to more accurately and efficiently complete your 1099 forms for the 2019 calendar year. Additionally, our E-File software works in conjunction with the Forms Filer to electronically file 1099s online. There are several e-file options so you can choose what works best with your business’s needs.
If you’re looking for 1099 preparing and filing software support, AMS has the tools to help. If you have any questions about our products, call our Sales and Information team at 800-536-1099.