Crunch time for A/P: Have you checked these boxes for Form 1099-NEC, Form 720 filing?

The big January 31 filing deadline for Form 1099-NEC is almost here!

Organizations must not only put Form 1099-NEC into the hands of payees by that date, the IRS needs its copies of the returns by Jan. 31 as well.

Fortunately, you have a little more time with Form 1099-MISC. The deadline is February 28, 2024, if paper filing and by April 1, 2024, if filing electronically.

Because penalties for inaccurate or late filing can be significant (for example, if late 30 days or less, the fine is $60 per form), it’s time to check how close your team is to having these tasks completed:

• Collecting W-9s. Have all vendors and independent contractors submitted accurate W-9 forms with their correct Taxpayer Identification Number?
• Identification of all reportable payments. Have all vendors that you paid at least $600 to in 2023 been identified? They all need to be sent a Form 1099 in a timely manner.
• Preparation of forms. Have individual 1099 forms been generated for each eligible vendor with accurate information in the designated boxes, including payment amounts and tax codes?
• Come up with a processing and reporting plan. If you’re filing at least 10 of any Form 1099 return, you have to electronically file them. You also need to select your preferred method for filing, whether it’s the IRS FIRE system or IRIS portal (both systems require a Transmitter Control Code), or utilizing a third-party tax software.
• Copies for internal records. In case of an audit, do you have internal copies of all filed 1099s and supporting documentation?
• Vendor communication. Have you informed vendors about the estimated time frame for receiving their 1099s?

If it seems like you’re behind schedule on any of these steps, it may be time to consider using an automation solution to streamline processing and filing tasks.

Like Form 1099-NEC, Form 720 also coming due

Form 720 – the federal return for businesses that sell goods or services subject to excise tax – for Q4 of 2023 also has a fast-approaching due date of Jan. 31.

Here’s your to-do checklist, which should be close to completion:

• Are you up-to-date on any recent changes to the taxes reported on Form 720 that are relevant to your business?
• Did you coordinate with departments like Purchasing and Inventory to ensure accurate tracking of taxable transactions?
• Did you double-check that Form 720 has your business name, address, Employer Identification Number, tax year, type of excise taxes and amount of excise taxes owed? Are the calculations accurate?
• Did you obtain invoices, purchase orders and any other relevant documentation related to your excise taxes for the fourth quarter of 2023?
• If you plan to file electronically, are you registered in the Electronic Federal Tax Payment System? Alternatively, the form can be mailed to the IRS address listed in the instructions​​.