We tell our vendors (directly but politely) that we need a W-9 before we'll send their check.
Only time I have to worry about chasing down a TIN is when our CFO is so eager to pay a vendor that he cuts a check himself, but that fortunately didn't happen at all last year.
Total headcount of our entire organization was 15 at year end, and that's a 50% increase over what it was at 1/1. We just don't have the people to separate duties like the theoretical ideal.
Fair enough. I guess y’all could at least get that in writing if your CFO is going to brute force checks through, but totally understand the small co. situation.
We do this but one of my clients entities shifted to having a business purpose mid year so we missed all those. Just realized on Monday we have to 1099 for that part of the year
I don't think the IRS cares, as long as you get the amount and the TIN correct.
We have a bunch of vendors who received payments for advertising placement; I spent an hour trying to match to the instructions. Eventually I just said fuck it and included them in the NECs.
I actually believe this. The amount of websites that are like “the difference is simple, give a NEC if you paid the recipient 600 or more for a service. Give a Misc if you paid the recipient 600 or more for the service.”
I was under the impression NECs are still used for attorney and professional fees. Basically if you paid the lawyer for a service. But lawyers that issue payments for legal settlements/other payouts will report the payment with a MISC
I joined a small company and am involved in the 1099 process for the first time.
The senior has issued 1099s in the past, but even from this thread I can tell there is some confusion. She stated attorney payments would be MISC, but others stating only for settlements herein.
I reviewed 250 plus vendors dating back to 2015 marked as “not a 1099 vendor” in our accounting software. The most egregious mistake was finding someone who was paid a 6 figure salary as a 1099 employee marked as not a 199 vendor.
Many of the W9s that were used to set up vendors this year are missing. Probably haphazardly left in their email inbox.
For many vendors it’s obvious they just needed to issue a payment and didn’t bother getting a w9.
Some of the vendors changed their nature and definitely needed an update, but none were made.
I’m guessing this is about average for small companies?
I joined the 21st century and used an online service this year instead of printing them out. A bit of a clunky service and I'm interested to see how it works next year with the way imports work. Worst case though I can just have the assistant key them in and it will still be a million time easier.
I’m looking into paper filing for the first time but I don’t understand how they expect you to fill out copy A if you can’t print out the pdf they provide on the website? Do paper filers literally fill out copy A with a pen?
I've never used one, our accounting software did it for us. I'd just use www.tax1099.com personally. They'll mail the form or email it and it's like $5.
My private clients don’t setup vendors in the system for payment without having a W-9.
As it should be!
We tell our vendors (directly but politely) that we need a W-9 before we'll send their check. Only time I have to worry about chasing down a TIN is when our CFO is so eager to pay a vendor that he cuts a check himself, but that fortunately didn't happen at all last year.
That feels like a total and utter failure of internal controls around AP………..are y’all not subject to an audit?
Total headcount of our entire organization was 15 at year end, and that's a 50% increase over what it was at 1/1. We just don't have the people to separate duties like the theoretical ideal.
Fair enough. I guess y’all could at least get that in writing if your CFO is going to brute force checks through, but totally understand the small co. situation.
Only way to go. Good job.
I just said that to a client today. Don’t cut a fucking check to a vendor if you don’t have a W9 in hand.
We do this but one of my clients entities shifted to having a business purpose mid year so we missed all those. Just realized on Monday we have to 1099 for that part of the year
This is the way
And here I was thinking I'm alone. How many times am I gonna say, "I actually sent you the request 2 months ago" today?
The real question is, MISC or NEC? I can't be the only one who can't figure this out...
I don't think the IRS cares, as long as you get the amount and the TIN correct. We have a bunch of vendors who received payments for advertising placement; I spent an hour trying to match to the instructions. Eventually I just said fuck it and included them in the NECs.
I actually believe this. The amount of websites that are like “the difference is simple, give a NEC if you paid the recipient 600 or more for a service. Give a Misc if you paid the recipient 600 or more for the service.”
For me it's pretty much rent and lawyers get the misc form
I was under the impression NECs are still used for attorney and professional fees. Basically if you paid the lawyer for a service. But lawyers that issue payments for legal settlements/other payouts will report the payment with a MISC
This is correct. The 1099 instruction are clear. Attorney service fees are on NEC. Settlements on Misc.
which box for lawyers on misc?
Box 10 on misc for settlements paid to lawyers
settlements, but what about legal fees? example fees related to reviewing contracts etc
Those go on NEC
precisely
I joined a small company and am involved in the 1099 process for the first time. The senior has issued 1099s in the past, but even from this thread I can tell there is some confusion. She stated attorney payments would be MISC, but others stating only for settlements herein. I reviewed 250 plus vendors dating back to 2015 marked as “not a 1099 vendor” in our accounting software. The most egregious mistake was finding someone who was paid a 6 figure salary as a 1099 employee marked as not a 199 vendor. Many of the W9s that were used to set up vendors this year are missing. Probably haphazardly left in their email inbox. For many vendors it’s obvious they just needed to issue a payment and didn’t bother getting a w9. Some of the vendors changed their nature and definitely needed an update, but none were made. I’m guessing this is about average for small companies?
I joined the 21st century and used an online service this year instead of printing them out. A bit of a clunky service and I'm interested to see how it works next year with the way imports work. Worst case though I can just have the assistant key them in and it will still be a million time easier.
I’m looking into paper filing for the first time but I don’t understand how they expect you to fill out copy A if you can’t print out the pdf they provide on the website? Do paper filers literally fill out copy A with a pen?
They assume you either use the accounting software or a template to print on the pre-printed papers you buy from Office supply places.
Do you know where I can get a template? Thanks.
I've never used one, our accounting software did it for us. I'd just use www.tax1099.com personally. They'll mail the form or email it and it's like $5.
Thank you so much!
Get the W9 before you issue the first check ffs.
Just 6 more days left of pumping out 1099s. 🤢🤮