Annual Form 1099 Preparation & Submittal

For clients whose Engagements include the preparation and submittal of Form 1099s for contractors.

Collect W9 Best Practices

It’s best practice to collect W9s from new vendors throughout the year. Ideally, our clients will not pay a vendor from whom we have not received a W9. The W9 tells us whether the vendor will need to receive a Form 1099 – we have documentation to support either a Yes, or a No, answer.

In November-ish…

Toward the end of the year, late November or early December, we should define the list of vendors we’ll need to send Form 1099s. In QBO, run a Vendor Summary report for the year and export this data to Excel.

• Filter the spreadsheet to remove vendors we have paid less than $600.
• Remove vendors that are obviously corporations or provide goods (versus services).
• Determine which vendors from whom we do not have a W9 (search Google Drive for W9, view the vendor’s profile in QBO for an attached W9).
• Make sure all lawyers and landlords are included. Legal fees and rents must always receive a Form 1099.
• Create a client task in Financial Cents for W9s needed. Send the list of vendors to the client. Specify a deadline of 12/10 or so in order to receive the info well in advance of 1099 deadline. Set auto-reminders and be sure to check back with client by mid-December for forms not yet received.
• Save W9s received to the Google drive and or attach to the vendor profile in QBO.

Enter Data into TaxBandits

When ready to create the 1099s, open TaxBandits and navigate to the proper area to create 1099s for this client.

• Note that the different 1099 forms are entered on different screen (1099-Misc, 1099-NEC)
• Enter the vendor data from the spreadsheet into TaxBandits for each type of 1099 form.
• Proof your work carefully and confirm names, EINs, addresses, amounts. No typos here! If the list of vendors is long – TaxBandits does have an import feature.
• Follow the TaxBandits process to review and submit these forms. (Match total to spreadsheet if possible.)
• Select the options to have TaxBandits mail 1099s to vendors and process the 1096.
• Pay attention to any state level requirements. TaxBandits asks you the question but doesn’t specifically give you the answer as to whether 1099s need to be filed with the state.
• Save a copy of all forms to the Google Drive for this client.
• Forward the 1099s and 1096 to the client if requested.
• Update the TMG tracking spreadsheet with the final number of forms and date of submission/completion.