It's That Time of Year Again: W9 Best Practices, Part I

This is a Bookkeeper’s guide to tips and tricks for W9 Best Practices so that YOU can be ready for 1099 filing in a timely manner at the end of the year.1099 MISC filing is completed each year, at the end of January and the deadline is typically the 31st of January. It's important to verify this deadline date with reputable sources such as this link to the IRS ruling agency as this date can change.The following includes suggested best practices to prepare for the 1099 filing process in a timely manner. It also provides information on requirements of 1099 filing. These are laid out in steps to follow in a typical order that they would happen:1. Collect a completely filled out W9 form (see W9 form shown above) from each applicable 1099 contractor that is already in service and has not currently submitted a W9 form as well as for each new vendor. (See letter provided for existing contractors to be found in Part II)2. Applicable Vendors would include:a. Any contractor that provides services. This includes those that are an INC. Even though a company may be an INC or may not meet the $600.00 threshold, their form still needs to be on file for future reference or in case of a review from an auditing agency.b. Any 1099 contractor that is a sole proprietorship or an LLC and that meets the $600 threshold. These vendors are typically recorded on box 7 or the 1099 reporting. Another example would be landlords/property management companies and they are recorded on box 1 of the 1099 MISC.3. Do not take "no" for an answer. This is why it is important to make the collection W9 forms a priority before engaging services and/or before the first invoice is a paid.4. It is helpful to know that you are not required to send a 1099 form to independent contractors such as freelancers, or to other unincorporated businesses such as LLCs, if you paid them via PayPal or credit card. That is the case even if you paid the recipient of more than $600 in the last year. All payments made by a credit card should be excluded from the 1099 totals, but if other payments were made to the vendor in addition to credit card payments and meet the $600 threshold, these should be reported.APM Help and Bookkeeping can help you with these important tasks either through Consultation or Full-Service Bookkeeping (anything associated with a $ sign) services. Call us today for a free consultation as the deadline is quickly approaching.Disclaimer: This is a Bookkeeper’s guide to W9 Best Practices and not legal or professional advice from a CPA. There can be exceptions and/or scenarios that are different than what is discussed in this content. It is recommended to seek advice from your CPA or Accounting Professional about your company specific accounting and subsequent 1099 filing at the end of the year.