Avoid 1099 delays

Welcome to February 1st – did you get your 1099s filed on time?

If it happened late in the day on the 31st you are probably saying “never again” or “there has to be a better way”.  You are not wrong! Most of the delays in filing 1099s come from not having W9s from your contractors. Change your daily workflow to fix this before it becomes a problem again next year.

Get the W9 upfront

The best practice is to ask for a W9 with the signed contract to perform work. Don’t worry about the amount to be paid. Having a W9 allows you to set your contractor up correctly in your accounting software.  It also helps to void duplicate entries, and verify the information you may already have is still correct. You want to be sure that when you issue the payment it is made out correctly based on the information provided.

Get the W9 with the invoice

The next best solution is to have the contractor submit their W9 with their invoice to be paid. If you still don’t have one, use some leverage by holding the payment until the form is received. As you may already know, once that payment has changed hands, the chance of receiving the W9 goes down dramatically.  You don’t want to be heading down the same road again.

Start looking for missing W9s before year end

Finally, do a 1099 review December 1st each year.  This allows plenty of time to follow up with any W9s which have slipped through the cracks. At this point, it is best to focus first on the contractors who meet the 1099 threshold, so they don’t delay your filing.
Making these simple changes to your business’ workflow will save you from having to pay for countless hours of follow-up work.  It will also relieve stress for you and/or your accountant when it comes time to file 1099 again.

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