If you having vendor payment problems I feel bad for you son, I’ve got 99 problems but a 1099 ain’t one!

The IRS is really interested in who makes money in America so they can make sure and get their tax money. There are many ways they get this information, the most common is your regular W2 wages and quarterly statements your employer sends.

But what if you work for yourself or if you pay people/companies that are not employees?

This is where 1099s come into play. 1099s forms are required to be filed by businesses for everyone they pay that makes over $600 during the year. (there are a whole bunch of other additional criteria on the IRS website https://www.irs.gov/instructions/i1099msc )

What do I need to file?

We suggest that before you make a payment to anyone you collect a W9 form. ( https://www.irs.gov/pub/irs-pdf/fw9.pdf ) This form gives you info about who the company is, what their EIN or SSN is, and where to send the 1099.

When do I need to file it?

You file with the IRS once a year and deliver to your recipients on or before the last day of January. If you missed the deadline, we can help you fix this problem and file late, usually with no penalty. If you don’t do it the risk is that in audit the IRS will disallow the vendor deduction and charge you back taxes on this deduction.

This seems like a pain, do we really need to send this to everyone?

NO, there are some people who the government trusts that they will pay the right taxes with or without a 1099. There are also ways that you can pay a vendor where someone else sends the 1099.

1. Corporations - You don’t have to send a 1099 to a corporation

2. At Retail - When you buy something at retail you don’t have to send a 1099

3. If you pay by credit card - When you pay by credit card, the credit card processing company will aggregate all the payments paid to the person you paid and send them a full 1099 for everything they got paid by credit card.

What about Venmo? Paypal? Cashapp? Chase Quick Pay? Those are kind of like credit card processors arnt’t they?

So, this one is hard - you should probably talk to us to make sure but in general, when you do peer-to-peer like payments this is the same as paying cash or check and would require you to send a 1099. In some cases, you can pay an extra processing fee like on Paypal when you “pay a business” instead of “pay a friend”

So what can I do to make this process easy?

Use an automated payment system that collects the info when you make the payment and files the 1099s for you.

1. Gusto.com

2. Melio.com

3. Bill.com

4. Pilot.co

5. Quickbooks online payments

Or schedule a meeting with us to help you file these, we will need the following info:

1. The amount each vendor was paid

2. W9 form including their, Name, Address, and EIN (or Social Security number)