Who knew contractors would become one of the most valuable resources in the gig economy? Companies are utilizing contractors more and more. And more contractors means more 1099-MISC forms. In your practice, it’s likely that you may see more contractors coming in and think tax season is going to be even more stressful than last year, but that is where you would be wrong. With the right software, the right process, and a strong dose of #ACSTherapy, 1099 season can be completed and delivered easily.
In addition to easy 1099 preparation and processing, Accounting Suite has compiled the following 1099 FAQs that you can share with your clients below:
Who should I send a 1099-MISC to?
The IRS deems anyone you have paid $600 or more to over the course of the previous year a non-employee worker. Keeping careful attention to anyone who does work is very important. Otherwise, you’ll be digging through old ledgers and receipts to create your list of 1099 recipients. In addition to the regular 1099s, there are also 1099-NEC for non-employee compensation.
When should I send 1099s?
All 1099-NEC forms have to be sent to your contractors and also to the IRS before January 31. Other 1099-MISC forms need to be sent to your contractor by January 31. Keep in mind that your 1099 is not due to the IRS until February 28, if you are sending it via mail, or if you are sending it electronically you have until March 31.
Before you send your 1099s keep these tips in mind…
First things first, read all the instructions. Instructions change periodically so make sure you are completing everything correctly, if you are using AccountingSuite, the process is simple and seamless with information flowing right into your 1099 forms from your general ledger.
Completing and sending 1099-MISC and 1099-NEC forms is a completed internal process for business owners. This means that you don’t need to communicate with the contractor once you have sent the forms.
#ACSTherapy Tip: Verify all the recipient’s information BEFORE you send out your 1099s to reduce errors and the need to reissue 1099s.
Simplify Your 1099s with AccountingSuite.
Another #ACSTherapy Tip: take copies of everything you send to the IRS as well as everything you send to the recipient.
This 1099 season process involves three crucial groups of people; you, your contractor, and the government. If anything is left out, it is your fault as the preparer or the 1099, not the contractor, not the government, YOU.
How AccountingSuite Can Help
AccountingSuite has reporting features that will allow you to create lists of all your contractors which will make assembling your 1099 season master list a breeze. From there, you can input the contact information to streamline the process of getting all your forms out to the correct people. Going through receipts and books to find that one contractor that you think did some work for you will be a thing of the past. All of your information will be in one centralized location.
1099s at this time of year are a fact of life for all business owners (especially if you want to avoid any IRS penalties!), 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. Eliminate the pain of year-end and 1099 prep by contacting our team today.