Save time and money with annual 1099 preparation
According to IRS regulations all businesses are required to file 1099-MISC forms to any non-incorporated contractor they paid $600 or more to over the course of the year.
Tips to Help Save You Time and Frustration at Year End:
- Be sure to obtain a completed and signed form W9 for all contractors/sub-contractors (the best time to get this is before you pay them)
- Immediately enter their data into your Quickbooks or other accounting software
- In Quickbooks be sure that you have also selected “Vendor is Eligible for 1099” on their “vendor” profile
- Carefully review your Chart of Accounts to determine which accounts will require review at year end to assure any vendors paid and coded to those accounts are captured for processing
- Under “1099 Preferences” in Quickbooks be sure to “map” all applicable Accounts as determined in the step above
How a Virtual Assistant Can Save You Time and Money on 1099 Preparation:
- Most office supply stores sell in minimum quantities of 25 – if you have have a few to prepare this can seem wasteful on numerous levels.
- If you do not file on time or at all you could be subject to penalties from the IRS or state agencies.
- If you do not have a computerized bookkeeping system you may find it cumbersome to print the forms (unless you have a prehistoric typewriter in your office)
What I do with all of my clients (even ones I do not do bookkeeping for) is have them submit the following information so that I can prepare and mail the 1099-MISC forms to all contractors.
- Determine if my client’s State Department of Revenue requires 1099 forms (and any income thresholds dictated by the State)
- If they use Quickbooks I have them provide me with a portable version of their Quickbooks file
- Don’t use Quickbooks? Provide documentation of the following for each contractor:
- Legal Business Name
- Complete mailing address
- FEIN or SSN (as applicable for their business entity structure and as completed on their submitted W9)
- Dollar amount paid in the calendar year
- My client’s business name, complete mailing address and FEIN numbers
Once I have the above listed information it’s easy-peasy for me to complete the remaining steps:
- I will contact vendors with no W9 on record to obtain the required document
- If the client does not provide me with a Quickbooks file I set up a “dummy” company in my Quickbooks file and enter in the annual amounts paid to each contractor
- All 1099’s are prepared and mailed directly to the contractors
- Client’s copy of the 1099, Copy A and Form 1096 are PDF’d and emailed to the client for their permanent records
- The hard copies of the client’s copy of the 1099, Copy A and Form 1096 are mailed directly to the client with an addressed envelope to the appropriate IRS location (and a note
- Any state documentation and forms are handled in the same manner as outlined in Steps 4 & 5
If you cringe at the thought of preparing and processing your 1099-MISC forms I’d be more than happy to assist you in 2011.