Accounting
For Form 1099-NEC, the recipient copies and the filing with the IRS are both due 31 January. Everything that makes that possible has to happen before December.
Most 1099 problems are really W-9 problems. A contractor was paid without one. The address on file is three years old. The name does not match the taxpayer identification number. Nobody is certain whether a payment was for services or for rent. In the last week of January, none of that is quick to fix.
We run the whole cycle: collecting W-9s before the money goes out, pulling the year’s payments from the books, deciding which form and which box each one belongs in, issuing the recipient copies and filing with the agencies. It is a small service that quietly protects a large deduction.
Scope
W-9 collection
Requested before a contractor is paid, not after. Without one you are required to begin backup withholding, and recovering it afterwards is nobody’s favourite conversation.
Form 1099-NEC
Payments for services performed by people who are not your employees — contractors, subcontractors, and fees paid to an attorney for legal services.
Form 1099-MISC
Rent, royalties, prizes, medical and health care payments, and gross proceeds paid to an attorney. Different form, different boxes, and a later filing deadline than the NEC.
Recipient copies and agency filing
Delivered to every recipient and transmitted to the agencies electronically, with the confirmations kept in your file.
TIN matching and corrections
Names checked against identification numbers before anything is filed, and corrected returns prepared where a mismatch notice arrives anyway.
1099-K reconciliation
The forms your payment platforms issue, tied back to the books so the same revenue is not reported twice. The reporting threshold for these has moved repeatedly, so we work from the rule in force for the year.
Outcome
The per-form penalty rises in tiers — filed within thirty days, filed by the start of August, filed later than that — and is higher again where the IRS finds intentional disregard. Multiply any tier by the number of contractors you pay.
Contractor payments you cannot document with a filed 1099 are among the first things an examiner disallows. The filing is what protects the expense.
If we do your bookkeeping, the payment totals already exist and are already categorised. January stops being an event.
Process
In November, not January. We list everyone paid during the year and flag who is missing a W-9.
Requests sent, follow-ups made, and clear advice on backup withholding where a contractor will not provide a number.
Each payment assigned to the right form and the right box, with the totals reconciled back to the general ledger.
Recipient copies out and the filing transmitted ahead of the deadline, not on the day of it.
Suited to
FAQ
Broadly, to individuals and unincorporated businesses you paid for services in the course of your trade or business, once the payments pass the reporting threshold for that year. That threshold was changed by recent legislation and is now adjusted going forward, so we confirm the current figure rather than working from the one everybody remembers. Payments to corporations are mostly exempt — attorneys and medical providers are the exceptions people miss.
File as soon as you can, because the penalty is tiered by how late the form is and the first tier is by far the cheapest. Filing late is materially better than not filing at all, and reasonable-cause relief exists where there is a genuine reason. Tell us what happened — we will get the forms filed and, where it is appropriate, ask for the penalty to be removed.
Almost certainly. The IRS threshold for mandatory electronic filing is now counted across all your information returns combined rather than per form type, which catches nearly every employer who also issues W-2s. California receives most 1099 data through the federal combined filing programme, but not every form or situation is covered, and where it is not the information has to reach the FTB separately. We handle both sides electronically and keep the confirmations.
Often needed alongside this
Running the numbers is the easy part. Staying on the right side of the EDD, wage orders, sick-leave accrual and worker classification is where employers actually get hurt.
We rebuild the periods in order, reconcile them properly, and then move you onto a monthly rhythm so it never happens again.
Reconciliation, statements, ledger and close — delivered on a published date each month, for less than a part-time bookkeeper costs.
Thirty minutes with an Enrolled Agent, at no charge. Bring last year’s return and we will tell you plainly what we would do differently — and what it would cost.