How do I do 1099s?

Form 1099-MISC is due to contractors by January 31, 2022 (or February 15, 2022, if amounts are reported in Box 8 or 10), but is not due to the IRS until March 31, 2022, if you file electronically, and February 28, 2022, if you file by paper.

Extensions for filing are only granted in catastrophic circumstances. Penalties can be costly. 

How can 1099s be easier?

Collect W-9s from all vendors as a normal part of the vendor onboarding process. A W-9 has the information you need to complete 1099s — legal status (LLC, Corp, independent contractor, etc.), name, address, and EIN/SSN.

In a well-designed bill payment system like Airbase, the system will request a W-9 from the vendor, and receipt of it can even be set as a condition for payment. In January, run a report to see who was paid more than $600, and to check that the system has the info you need to complete the 1099s, or send the report to your preparer. 

Is there any way I can get out of submitting 1099s?

When vendors are paid by credit card, the 1099 burden shifts to the payment processing company who will send Form 1099-K. Their reporting requirements are different (depending on the state) but the responsibility is theirs. With Airbase, it’s easy to select payment by card instead of by check, ACH, or wire, and in so doing remove an obligation to report the payment. 

Read our blog on 1099 processes for more information, and register for the upcoming webinar, Year-end tax planning, including the joys of 1099 prep!