Easy Things to Do to Minimize 1099 Pain in January

​Halloween has just past, and now is the time that I start to think about all the year end tasks and compliance items that businesses must do.  I know, it seems early, but now is the time to make sure that you are prepared for the very quick deadline coming up. 
One of the first ones that we must deal with each year is the Form 1099-Misc.  Due out by Jan 31 to both the recipient and the IRS, this is a quick deadline and often needed by the recipient to accurately complete their own tax returns.
So, what to do now?  So much – and it will make it all the easier in January if you do.  Here is a quick list of what you should have ready. 

1.  Review your payments to independent contractors and those that you are unsure of their entity status.
2. Make sure that you have up to date form W-9s on file from your vendors.  The most recently released form has check boxes for either a single member LLC, or an LLC that is taxed as a regular corporation, an S corporation, or a partnership.  You will need this information to accurately send out 1099’s. 
3. For those that you are missing W-9’s now is the time to request them.  Also, be sure to update addresses and entity types.
4. Review your accounting software to mark the vendors and gl accounts that may be subject to 1099’s.  Remember the general rules are any $600 and greater, to a non-corporate entity should be checked.  And don’t forget about those payments made to attorneys.  If you paid $600 or more to attorneys in the course of your trade or business, then you need to include them in your W-9 requests, irrespective of their entity type. 

Since we are not at the year end, you may think that you can disregard vendors.  But, it is better to be prepared now, so when Jan comes, all you need to do is run your report and get those 1099’s done.  

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