As the end of the year approaches, it’s time to start planning for preparing and filing your 1099s. Properly filing your 1099s helps you stay compliant with IRS requirements, avoid penalties, and ensures smooth operations during tax season.

To make the process easier for you, here are some best practices to keep in mind:

Verify Information Early

• Double-check the accuracy of vendor names, Tax Identification Numbers (TINs), and addresses.
• Make sure to collect W9’s from all vendors.

Update Your Systems

• Update addresses in your accounting system for any changes made with vendors during the year.
• Make sure all vendors are checked off in your accounting system if they require a 1099. 

Keep Accurate Payment Records

• Review your books for payments made by cash, check, or bank transfer, as these require 1099 reporting.
• Remember: Payments made via credit cards or third-party processors (e.g., PayPal) should not be included (they will be reported by the payment processor on Form 1099-K).

Issue 1099's

• Issue a 1099-NEC for non-employee compensation exceeding $600.
• Issue a 1099-MISC for rent, royalties, or prizes paid over $600 (other limits may apply).

Know Your Deadlines

• January 31, 2025: Forms 1099-NEC and 1099-MISC must be sent to recipients.
• February 28, 2025 (paper) or March 31, 2025 (electronic): Deadline to file with the IRS.

Your CAAS representative can assist with 1099 preparation, and can also provide insightful financial strategies. If you have questions about 1099 prep, leave a comment below, or feel free to contact me directly. I'm happy to help!