Simplify Your 1099s
In the age of the gig economy, more businesses are relying on contractors than ever before. More contractors means more 1099-MISC forms. You may think that means more headaches during tax season—the last thing any business owner or accounting professional needs—but it doesn’t have to. With the right software and process, 1099s can be assembled and delivered quickly and easily.
With the relevance of 1099s not likely to dissipate anytime soon, here’s everything you need to know about handling them effectively.
Who to send a 1099-MISC to
The 1099-MISC form is for “non-employee workers.” The IRS deems anyone you’ve paid $600 or more to over the course of the previous year a non-employee worker. In an ideal world, you’ll have kept track of anyone who qualifies during the course of the year. If not, you’ll have to go through your receipts and create a list of people to send 1099s to. There is also a specific 1099-NEC form for non-employee compensation.
When to send
1099-NEC forms must be sent to both contractors and the IRS before the deadline of January 31. Other 1099-MISC forms are due to recipients on the same day, but can be submitted to the IRS via mail through February 28 electronically through March 31.
Before you send
The first and most important step is to read all up-to-date IRS instructions before sending forms. For the business owner, preparing and sending 1099-MISC and 1099-NEC forms is a completely internal process. You will not need any communication from the recipient once sent, which is both a blessing and a curse. The plus is that you won’t need to wait around for a reply before completing the process on your end. The minus is that you’ll need to make sure recipient information is completely accurate before sending 1099s. As such, it’s crucial to verify all data on contractors prior to assembling and delivering forms.
Simplify Your 1099s With AccountingSuite. Also, remember to send copies of everything to both the IRS and the recipient. The 1099 process involves all three parties (you, the contractor, and the government), and you’ll be the one on the hook if anyone gets left out. The person responsible for making 1099s happen is not the contractor or the IRS; it’s you.
How AccountingSuite can help
AccountingSuite’s reporting features allow you to create lists of everyone who’ve paid over the previous year, thereby assembling a master list of 1099 recipients. From there, you can input recipient contact information and streamline the process of getting everyone the forms they need. You won’t have to dredge up receipts from January to wonder if that graphic designer did $500 or $1,000 worth of work. Instead, all that data lives in one centralized location.
Taxes are a fact of life for all business owners, but the anxiety surrounding them doesn’t have to be. AccountingSuite can help you make your tax process run smoothly so you can get back to growing your business. Head over to our pricing page to find out more.