My one biggest “pet peeve” about doing 1099’s doesn’t even involve the IRS! Can you guess who this post is going to be about? Yes, that’s right … it’s going to be about YOU … the business owner (but I promise to take it easy on you and make this more of a “tips for you” type post!)
Most seasoned business owners know that you have to issue 1099’s at the beginning of each year for amounts paid under certain circumstances for the previous year. This includes, but is not limited to, subcontractors, attorneys, vendors, etc. If you need a complete refresher course on 1099’s, please visit the IRS’s website for full information at this link.
In order to properly obtain the social security number or tax identification number for the person or company you need to issue a 1099 to, you should have them complete a W-9 form. You can download one here, just make sure it is the most current form. Sounds pretty simple, right?
So, here is my “pet peeve” part to all of this: those who wait until it’s time to produce 1099’s to realize they don’t have a tax identification number or social security number for their vendors. This leaves you (or your bookkeeper or accountant) scrambling around to obtain the proper information from your vendors in order to complete the 1099’s and have them provided to the vendor and filed with the IRS by the deadlines.
The simplest way to avoid this hassle and stress (for you AND your bookkeeper/accountant) is to get into the habit of having your vendor fill out and return the W-9 to you BEFORE you even issue a check. In this way, you will always have the proper documentation and information necessary, and this will make 1099 processing a breeze for you. And trust me, if your bookkeeper/accountant files your 1099’s for you … this is one habit they will love you for!