Year End and 1099 Reporting
The IRS requires businesses to report all payments totaling over $600 as part of their 1099 reporting. Business owners will need to report payments made to individuals and certain entities, excluding corporations.
What Do You Need for 1099 Reporting?
For 1099 reporting, you will need details for every payee including name, taxpayer ID, address, and entity type. Having a W-9 form from each of your vendors will give you all the information you need. Many businesses request a new W-9 every year after their year-end reporting to ensure that they have the most up to date and accurate information.
1099 Filing Requirements
Businesses are now required to electronically file 1099s if they send 10 or more forms. This new regulation is intended to streamline the reporting process, as it not only saves time, but can reduce the risk for errors that can result in costly penalties.
Steps for Year End Reporting
To simplify the year end 1099 reporting process, follow these basic steps:
- Request W9 forms from all vendors before making any payments.
- Maintain an organized record of all payments made to each vendor throughout the year. Tracking payments can be automated through several software options.
- Verify vendor information.
- Begin the reporting process early to avoid any last-minute complications. Tracking payments throughout the year can help prepare you for year-end reporting so it isn’t such an arduous task all at once.
Is it Worth Having a Professional Handle 1099 Year-End Reporting?
Filing 1099 forms can be time consuming and mistakes can lead to penalties for you and your vendors. Partnering with In Balance Bookkeeping Solutions can help you with your 1099 reporting process by keeping your books organized and ensuring that all your reporting is done accurately and on time. Because this is such a crucial responsibility for business owners, outsourcing to In Balance Bookkeeping Solutions is a smart way to stay on top of this task and always remain in compliance.
