Issuing 1009s is important to keep your practice in compliance with federal law, request W9s from contractors now.

As the year ends, many of us feel a sense of anticipation. Whether due to the upcoming holidays or a well-deserved vacation, we all have a spring in our step. Take a minute to shift your focus from holiday plans and reflect on the past year and what you must do to wrap up your practice’s accounting of 1099 contractors.

Independent contractors, often called "1099 contractors," are individuals or businesses that provide services to another entity but are not employees. Sometimes, these are easy to remember, such as paying a contractor for repairs. In other cases, 1099 contractors are less obvious. Did you pay anyone over $600 for services rendered? If so, they may need a 1099. 1099’s are not required from S-Corps or for payments made via credit card.

To file a 1099, you must get a Form W-9 from the contractor. Check your records for any invoices that may require 1099s. If you find any, contact the contractor and request a W-9. Most contractors are willing to address these inquiries. Always send a copy of the W-9 to your trusted CPA.

It may seem a bit tedious, but 1099 reporting is important to keep your practice in compliance. If you are unsure that a 1099 is needed, talk to us, and we will help.