With the first official day of fall almost here, your Finance team needs to start getting ready for year-end. And a good place to start is ensuring you’re submitting accurate info to IRS about your independent contractors and that they receive all important tax documents.
One of A/P’s crucial year-end projects is making sure Form W-9 information and 1099 status for each of your vendors are up to date.
Depending on the number of vendors in your master file, this could become time-consuming.
Getting data ready for year-end
Here are steps A/P can take to make sure vendor taxpayer data is up to date in preparation for year-end:
- Run filters on your vendor list. If your vendor list is large, filter search it just for vendors your company paid in 2022.
- Check that those vendors have a W-9 on file. Make sure the entity type and Employer Identification Number/Social Security Number are entered in the correct fields in your master vendor file. It’s helpful to add a notation, such as an asterisk, after the name of any vendor without a W-9. This allows you to filter the list for vendors still missing a W-9, as well as for specific entity types.
- Make sure your accounting software is set up to track payments for Form 1099-eligible vendors with W-9s on file.
- Send W-9 requests to any vendors that don’t have one on file.
- As completed W-9s are returned, update the vendor’s legal name and address, entity type and tax ID number.
- Schedule time to follow up with vendors that haven’t responded to 1099 requests.
Important filing deadlines
Here’s a breakdown of important IRS deadlines related to 1099s for tax year 2022 that A/P needs to know:
- Form 1099-NEC (with Form 1096 if paper filing), due to recipients and IRS Jan. 31, 2023
- Form 1099-MISC (no data in boxes 8 or 10), due to recipients by Jan. 31, 2023; paper forms due by mail to IRS Feb. 28, 2023; due by e-filing to IRS March 31, 2023
- Form 1099-NEC (with data in boxes 8 or 10), due to recipients by Feb. 15, 2023; paper forms due by mail to IRS Feb. 28, 2023; due by e-filing to IRS March 31, 2023.
Speaking of electronic filing, remember that all employers that submitted an application to IRS prior to Sept. 26, 2021, for IRS FIRE system transmitter control codes will need to submit and complete the new, online-only information returns application for transmitter control codes by clicking here.