1099 Information Reporting & Matching

As we approach the close of 2020, it is time to plan for year-end reporting.  One of the main year-end reporting items that can be time consuming, and comes with stiff penalties if not done properly, is 1099 reporting.

At Seth & Alexander, we can help you with the 1099 filing process. Our process will match the TIN information from the W9, e-file the required 1099, print the form, and mail it to the recipients. We have put together a fee structure to give you piece of mind to do the filing. We also have processes to gather the data and verify it before filing.

Who gets a 1099?

All contractors and partnerships who did more than $600 of work for your business should receive a 1099.

Who needs to fill out a 1099 form?

If your business hired the contractor and paid them more than $600 in a year, you’re responsible for issuing them a 1099-NEC. In other words, the payer fills out the 1099.

Don’t file 1099s for corporations

It’s rare, but sometimes an independent contractor will be registered as a C corporation or S corporation. You don’t need to file Form 1099 for a contractor registered as a corporation.

You can see whether a contractor is incorporated based on the information on their Form W-9. Request one from any contractor as soon as you hire them. Also keep in mind that corporation names are typically appended with “, inc.”

Don’t file 1099s for employees

You’ll need to file a Form W-2 to report wages, tips, and other compensation you paid to an employee during the tax year.

There are significant penalties for misclassifying employees as independent contractors. Make sure you know how to tell the difference between an independent contractor and an employee before you submit a 1099.

If you would like our assistance, please let us know so that we can discuss the process and start gathering data as soon as possible. Remember, the filings must be done by January 31, 2021.

© 2020 by Seth & Alexander

Manish Seth, CPA, CFE

E: manish@sethandalexander.com

T: 281-660-7384

3 Sugar Creek Center Blvd, Suite 100 Sugar Land, TX 77478

M. Alexander Aguilar, MBA

E: m.alexander@sethandalexander.com

T: 832-470-8670

3 Sugar Creek Center Blvd, Suite 100 Sugar Land, TX 77478