Let’s be honest, preparing 1099s is one of the least fun parts of running an accounting business. It’s time-consuming, thankless, and honestly, a bit of a mess sometimes.
If you’re a business owner, it’s probably not your favorite thing to deal with either.
But, like it or not, 1099s are non-negotiable, so let’s break down why they’re such a pain and what we can do to make the process easier for everyone.
What Makes 1099 Prep So Frustrating?
It Doesn’t Feel Like a Priority
Many business owners don’t see the value in 1099s. They’re just another form to file, right? But for accountants, this is serious stuff.
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Non-compliance comes with penalties, so it’s not something we can ignore. Still, getting clients to see the importance can be tricky.
The W-9 Drama
One of the biggest headaches? Chasing down W-9 forms from vendors or contractors, after you’ve already paid them. If you don’t collect this form at the start of your working relationship, good luck getting it later.
It’s even harder when the vendor isn’t experienced or doesn’t understand why you’re asking for it. Trust me, it’s not fun.
Gathering and Fixing Data
Data gathering, filing the forms, making corrections when things go wrong, it’s all a huge disruption to the more important work accountants could be doing.
Every little miscommunication or missing piece of information just adds to the chaos.
It’s a Low-Pay, High-Stress Service
Here’s the truth: accountants don’t charge much for preparing 1099s, but the work involved? It’s a lot.
Unfortunately, we can’t just stop offering this service because most clients aren’t equipped to handle it on their own. When they try, it rarely goes well.
The Risk of Penalties
Let’s not forget the stakes here. If 1099s aren’t done correctly, you’re looking at hefty penalties.
As accountants, we do our best to protect our clients from this, but it’s not always a straightforward task.
How You Can Make 1099 Season Less Stressful
Okay, so what can you do to make 1099 prep a little less painful (for both you and your accountant)? It’s simpler than you might think:
Ask for W-9s Early: This is the golden rule. The moment you start working with a new vendor or contractor, have them fill out a W-9. Don’t wait until the end of the year or after money has changed hands. It saves everyone a ton of stress.
Stay Organized: Keep track of all payments to your vendors and contractors throughout the year. When tax season rolls around, you’ll be glad you did and so will your accountant.
Communicate: If your accountant asks for information, don’t wait weeks to respond. The faster you can provide what they need, the faster they can get those 1099s squared away.
A Little Appreciation Goes a Long Way
1099 prep isn’t fun for accountants either. It’s tedious, time-intensive, and not exactly the most profitable part of our work. But we do it because we know how important it is to keep you compliant and out of trouble with the IRS.
So, the next time you’re working with your accountant on this, just know they’re doing their best to help you avoid some pretty hefty fines.
The Bottom Line
No one loves dealing with 1099s, but it doesn’t have to be a nightmare. Collect those W-9s upfront, keep your records tidy, and work with your accountant as a team.
It’s all about making the process as smooth as possible, so you can focus on what really matters i.e. growing your business.
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