The Complete W9 and 1099 Guide - No One Told You About
Recently, I was chatting with a client, and they asked, “So…how important are W9s really?” A simple question, but it turns out they had never collected W9s from their contractors—and their previous bookkeeper hadn’t thought to mention it. For them, this wasn’t even on the radar!
I realize that, as a bookkeeper, I can take my knowledge for granted. I get so deep into the details of tax compliance and financial reporting that I sometimes forget not everyone lives in a world where W9s are second nature. That conversation made me realize there might be others out there who just don’t know. So, here I am, sharing what I know about W9s and 1099s, because these little forms matter more than you might think!
If you’re not already on board with collecting W9s and submitting 1099s, buckle up. This is the crash course you didn't know you needed.
Step 1: Get W9s from Contractors Before They Get Away
Imagine this: you've wrapped up a job with an amazing contractor who helped bring your big project to life. Now they’re on to their next gig, and you realize…you don’t have any of their tax details. Cue the scramble to track them down with awkward emails that make you feel like you're asking for money.
Here’s the deal: get W9s up front. Just make it a rule of thumb. A W9 form tells you all the important tax info about your contractor, like their legal name, address, and tax ID number. Basically, it’s the who’s who of financial reporting. You don’t want to be chasing them in January when tax season is breathing down your neck (and theirs, too).
“Pro Tip: Get W9’s before you hand over that first check, latte, or gift basket.”
Step 2: Determine Which Contractors Qualify for 1099s
Once January rolls around, the IRS would love to see you submit 1099 forms for each contractor you paid over $600 in the past year. And here’s the fun part: it’s not just the IRS. Your contractors will expect these forms too because they’ll need them to file their own taxes.
A 1099 essentially says, “Hey, I paid this person money,” which then flags the IRS to check that said person also reported this money. (Yes, they are serious about keeping everyone honest.) When you don’t file 1099s, the IRS might give you the side-eye and could come knocking to ask why you didn’t follow this simple request.
“Spoiler Alert: 1099s Are NOT Optional (Unless Tax Audits Are Your Hobby) The fines for late 1099s are real. Like, painfully real. Just do them on time, and you’ll thank yourself later.”
Step 3: Don’t Wait! Submit 1099s for Each Qualifying Contractor by January 31st
Look, forgetting your keys is one thing. Forgetting your contractors’ 1099s is another. Whether you work with one freelancer or 20, you need to make sure you’re sending out a 1099 to each qualifying contractor. Not only will they be happy (and avoid issues with their own taxes), but you’ll also avoid penalties, awkward phone calls, and that one thing we all want to avoid: IRS interest.
If this feels overwhelming, don’t sweat it—set a reminder for the beginning of January to get started. Think of this as your New Year’s tax resolution: submit the 1099s by January 31st. Your future self will thank you.
“When you consistently send out 1099s, you’re saying, “Hey, I’m running a legit operation here.” You’ll build up a reputation as a responsible business owner (and sleep soundly knowing you’re in the IRS’s good books).”
Step 4: Save Yourself the Stress - Put it On Repeat
W9s and 1099s aren’t exactly anyone’s idea of a party, but getting them done is worth the peace of mind. Add them to your list, set reminders, and don’t hesitate to automate it if you can. Plenty of software out there can help, or a trusty bookkeeper can walk you through the steps so you’re never caught off guard again.
“Bonus: Make this your moment to shine! Proudly declare your 1099 compliance to friends, family, and anyone who will listen. Just kidding—but seriously, keep this up, and you’ll be the responsible, tax-savvy business owner others look up to (and envy a little bit).”
Step 6: Ditch the 1099 Hassle by Partnering with a Team
If you’d rather avoid the game of “Where’s That W9?” our team has you covered. We’ll take care of filing your 1099s and give you the lowdown on which contractors need a W9 or are missing one entirely (so you’re not left guessing). It’s like having a tax-season sidekick that handles the serious stuff while you focus on what you actually enjoy in your business.
In Summary: Embrace the W9s and 1099s. Love them, cherish them, and treat them like the unsung heroes of your business paperwork. You might not have asked for this, but you can definitely own it.
Ready to Know Your Numbers, Make Smarter Choices, Save Money, and Watch Your Business Soar? Schedule a Free Consultation Today!
