Here’s a quick and easy-to-follow checklist to help you navigate through the tax season in 2021 for 1099 forms.
As business taxpayers say goodbye to a very harsh and turbulent 2020, they are welcoming 2021 with hope and positivity. And as 2021 fast approaches, business taxpayers are also preparing for the tax season which starts with the New Year.
Since the due dates for all 1099 forms have been moved from 31st March to the 1st of February, businesses are gathering all the required information, documents, forms, and other important data required to file 1099 forms, including the recent addition, 1099-NEC.
If you’re new to business tax filing or need help with organizing your e-files or looking for a checklist to help you get started, your search ends here.
We have put together the ultimate checklist that you need to file your 1099 forms for the tax year 2020-2021.
There is no better way to start the new year than to get taxes out of your way. That way you have the rest of the year for yourself.
Have a smooth and turbulent-free tax season with our checklist by your side.
You can use this as a playbook when you’re filing your forms. What’s more? This checklist will help you understand if you have done everything necessary to comply with the IRS. Additionally, it gives you a good picture of what you need and how to get started.
So, without further ado, let’s get cracking on this checklist.
Checklist For 1099 Tax Forms: An Overview
We have added all the essential tasks that enable a hassle-free tax filing process. Further, if you are sure that the items don’t apply to your business, then you may remove any of the items in this checklist.
Additionally, if you think that we may have missed anything important that applies to your business, you can add such tasks in order of the tax filing process.
Essentially, this checklist is designed to streamline the elements involved in the tax filing process and make your job easy.
Note: We have also added small boxes (□) next to each of the tasks to help you check them off as soon as you finish the task.
Checklist For 1099 Tax Forms
- Review Vendors List □
- Send Form W-9 to vendors □
- Collect & Review Form W-9 □
- Conduct TIN Checks □
- Fill Out Your 1099 Forms □
- Review The Forms □
- Send Copies of 1099 Forms to Your Contractors □
- Schedule Your e-File □
Screenshot and print this checklist and pin it on your vision board or your work desk so that you will have the checklist with you when you are swamped with paperwork.
Send Form W-9 To Contractors/Vendors
Business taxpayers are often in such a rush to fill out the forms that they forget to send forms to their contractors or vendors to get the required information.
Be sure to send Form W-9 to all your vendors at least a week before you start filling out your forms. You don’t want to send this form to your vendor on the day you are filling out your forms. It would cause a lot of back and forth; disturb your work process, and result in other unpleasant situations, which end up delaying the process.
When you send the forms with a timeframe, it allows your vendors enough time to provide the necessary information and send it back to you. If the information provided seems to be wrong, then such corrections can be made within this 1-week timeframe.
Collect & Review Form W-9
Once your vendors have finished filling out their W-9 forms, do collect the forms from each of your vendors respectively and review the information that they have provided. Make sure that the mandatory fields are not left blank.
If any of the fields are left blank, make sure that you follow-up with your vendors to get the required information.
Conduct TIN Checks
Now, this is a step that no business taxpayer can afford to miss. TIN Matching is the most crucial step for taxpayers that want to avoid heavy penalties and B-notices from the IRS.
Conduct a TIN Match to check if the Taxpayer Identification Number and the name combination match with the IRS records.
You can conduct TIN Match here on Tax1099 securely.
If you want to check less than 25 TINs, then you can do so with Interactive Sessions. It should not take you more than a few minutes to an hour to get the status of the TINs.
If you want to check more than 25 TINs, then you must choose ‘Bulk Session’ and import all your vendor data, and submit the name/TIN combinations.
Note: The IRS takes up to 2 days to accept/reject Bulk TIN Matches.
If the IRS rejects your TIN Match request, it means that your vendor has not provided the correct information. You must immediately follow-up with your vendor to get the right information.
If the IRS accepts your TIN Match request, it means that you are ready for the next steps of the tax filing process.
Fill Out Form 1099-NEC
If you have paid $600 or more to a contractor or a vendor or a freelancer in the calendar year 2020, then you must report such payments on Form 1099-NEC.
NOT on Form 109-MISC.
If you don’t already know, Form 1099-NEC deals with nonemployee compensations. So, any payments made to nonemployee workers are treated as nonemployee compensations. Learn more about it here.
- Fill out both Copy ‘A’ and Copy ‘B’ of Form 1099-NEC.
- Send Copy ‘A’ to the IRS.
- Send Copy ‘B’ to your vendors.
There’s an additional copy of this form, called ‘Copy 1’, which needs to be submitted to the state tax departments.
Each state has different tax filing requirements, so be sure to check with your state tax department, and proceed accordingly.
- Check State-Wise 1099-NEC Requirements
- Check State Filing Requirements
- Box-Wise Guide To Form 1099-NEC
Fill Out Other 1099 Forms
Apart from 1099-NEC, businesses also use Form 1099-MISC, 1099-DIV, and other 1099 forms to report various incomes and payments. So, be sure to fill all the required forms (the ones that apply to your business specifically) and start filling them out.
Not sure which forms apply to your business? This IRS guide will help you understand which forms should you file and when.
Review The Forms
After you are done filling the forms with the required information, be sure to review the information for spelling, accuracy, and IRS record compatibility.
Remember, it is extremely important to file your forms only when the information is accurate. If you are in a rush to file your forms and do not provide the correct information, the IRS will reject your filings, penalize your business, and in worst cases, even impose prison time for noncompliance.
Schedule Your E-Files
Use powerful yet affordable e-filing platforms like Tax1099 to e-file your tax forms. With its efficient features and time-saving integrations, you can easily schedule your e-files manually.
Don’t want to schedule manually? No problem, Tax1099 automatically schedules all your e-files for at least a week before the due date.
It’s a must-have e-file compliance tool if you want to be done with your tax forms quickly and accurately.
PS: Tax1099 is an IRS-authorized e-filing platform used by 150,000+ businesses.
Learn more about Tax1099 here
Paper File At Least A Week Before The Due Date
If you are choosing the traditional paper filing method, then make sure that you order all the forms that you need to file your taxes at once. The IRS will send the forms to you via US Postal Service.
Since there is no special deadline dedicated for e-files or paper files, all 1099 filings have to be submitted to the IRS by the 1st of February 2021.
Don’t Forget To Postmark & Address Your Paper Files
If you are paper filing, be sure to postmark your mail package before you drop it in the mailbox. And be extra careful when addressing your files.
Do not fold your mail files. Your forms cannot be scanned if they are folded. Send flat mail files to the IRS for easier scans.
And that’s the end of the checklist!
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