Bookkeeping is the daily recording of financial transactions so you can tell how much income your business made, how much you spent, and how much was left over. The...
The 1099-MISC is issued each January by businesses and nonprofits to vendors they paid in the prior year that meet certain criteria. There are a variety of different payments that must be reported on this form. The two most common are rent payments and payments to subcontractors that performed a service for your business. The purpose of this article is not to get into the rules for which payments to include on the form, but how to automate the process. The 1099 filing is mandatory but it doesn’t add value in terms of improving your bottom line. So how do you streamline and automate this process to save time and money?
There are automated solutions offered by a variety of vendors, including Tax1099, Greatland, and 1099Pro, just to name a few. While I can’t speak for all of the applications, we’ve used Tax1099 the past two filing seasons with great success. It connects directly to your accounting software and brings over your vendor information and payment data onto the 1099 forms. All that you have to do is review the information that sync’d over and submit. The process change can reduce 70-80% of your 1099 filing time if you are still paper filing and mailing the forms.
Each year your basic process will be the following:
- In your accounting software, review the payments you made to vendors and ensure you have W9s for each vendor on file.
- If you do not have W9s for a vendor, you can send an electronic request via Tax1099 (or other applications) to your vendor.
- After you have confirmed all eligible vendor payments are properly marked as 1099 expenses in your accounting system, you will login to Tax1099 and sync the current year data.
- Proof the data in Tax1099, select the filing date for your forms, and submit your forms. That’s it!
- 1099s can then be emailed by Tax1099 to your vendor or they will mail a paper copy to vendors on your behalf if that option is selected.
The 1099 filing process doesn’t have to be tedious or time-consuming and it’s another process you can automate in your bookkeeping system so you can save time and money on your business!