time sensitive 1099s & W9s

Hello Lovelies,

Now is the time to get your records in order for 2011. Hopefully, you’ve been tracking your spending as you go along, but if not you have just a couple weeks to know who you paid for work last year.

If you paid anyone $600 or more for their services over the course of 2011, you are responsible for telling the IRS about their income. You use the 1099 form to do that.  Of course, this is not for employees (most of you reading this don’t have employees yet). We are much more likely to collaborate with sub-contractors and other professionals. Any amount that your business pays to a lawyer needs to be reported.

You can read all the rules on the IRS website here.

Gathering up this information & putting it in the correct forms and formats is a great Financial Friday activity.

  1. Be sure you have Tax ID Numbers (TIN) or Social Security Numbers (SSN) and current mailing addresses for everyone you’ve worked with.  Asking them to fill out a W9 is an easy way to do this.
  2. Search through your records for how much you have paid them. Those $40 checks to the cleaning lady can add up! Fill out the 1099 forms for all the people your business paid $600 or more (remember your IT guy, your cousin who was your ‘assistant’ for 2 months, everyone!)
  3. Send them their copy of the 1099 & ask them to get back to you *pronto* with any corrections or questions. They need to get back to you by Feb 15th, 2011.
  4. Send the IRS their copy of the 1099s (the red copy) with a 1096 form “cover letter” before the deadline.
  5.  Do a happy dance!

And then get on with your fabulous work-creating for, healing, building up your community.

Any questions or observations? Leave ‘em in the comments.

One Response to time sensitive 1099s & W9s
  1. Abi Cowell
    January 25, 2012 | 3:53 pm

    Thanks for the reminder in plain English, Christyna! Reading the IRS website makes me cross-eyed.