Vendor W-9s and 1099-NECs

Updated: 11/30/2022

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APM Help is excited to share our best practices to help you file 1099-NECs quickly and accurately this coming tax season! We've outlined our steps for success in this blog post, so continue reading to learn our tips and tricks for a stress-free tax filing process.

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1099-NEC forms must be completed each tax year, typically no later than January 31st. However, you should verify this deadline date with the IRS ruling agency, as this date can sometimes change:

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https://www.irs.gov/instructions/i1099gi#en_US_2022_publink1000287056

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Steps for Success

1. Collect a completely filled out W-9 form from each applicable 1099 contractor (see W-9 form above) that is already in service and has not currently submitted a W-9 form, as well as for each new vendor.

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2. You are required to file 1099s for the following Vendors:

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Any contractor that provides services. This includes those that are an incorporation. Even though a company may be an incorporation 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.

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.

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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.

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4. 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.

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About APM Help

APM Help and Bookkeeping can help you with these important tasks through private consultations or full-service bookkeeping services. Reach out to us today for a free consultation and review of your database, as the filing deadline is approaching fast.

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Disclaimer: This is a guide and should not be taken as legal or professional advice from a CPA. There can be exceptions and scenarios that change the way you should file. It is recommended to seek advice from your CPA or Accounting Professional about your company-specific accounting questions at the end of the year.