1099 filing checklist – Here’s everything you need to double-check before you submit your 1099 forms to the IRS in 2022.
If you’re a self-employed individual, or a small business, or an enterprise then you must be all ready for the filing season that’s fast approaching in Jan 2022 for the 2021-2022 tax year. Starting January 1, 2022, the IRS will start accepting the 1099 forms for review.
If you haven’t already heard about the updates to the 1099 forms for the 2021 tax year or if you have missed the updates during your tax prep, use the following guides to read, complete, and update your forms with the appropriate data quickly.
Use the following guides to obtain a comprehensive understanding of the 1099 form updates, learn the simplest ways to fill out 1099 forms, and follow the eFile regulations as necessary.
- Updates To Form 1099-MISC: A Beginner’s Guide
- Updates To Form 1099-NEC: A Beginner’s Guide
- Updates To 2022 Paper File Threshold: 1099 Forms & More
- Understanding Form 1099-NEC
- Tax Guide For Small Business Owners
This checklist has been designed to help you in the following ways.
- Review your 1099 forms;
- Give your reports a second glance;
- And make any necessary last-minute changes to improve the reporting accuracy.
Consider this to be a little practice to prevent eFile rejections and penalty assessments from the IRS.
What’s more? This checklist will additionally help you review if you have everything in order and ready for the upcoming filing season. And if you need to change or give something a little tweak, now’s the time.
You can screenshot the following checklist or print it out and tape it to your vision board to keep a track of the tasks as you progress through each box.
You can check off the little boxes next to each task as and when you complete the task for good.
Checklist For 1099 Forms eFile & Compliance: 2021-22 Tax Year
- Check your vendor lists
- Verify TINs (Taxpayer Identification Numbers)
- Validate your 1099 reports
- Check your paper file threshold
- Send copies of forms to recipients (before due dates)
- Be sure to file your forms before the due date
- Schedule your eFiles
A brief explanation for every task listed above is provided below to help you navigate through your 1099 reports and processes conveniently.
So, let’s get to it.
Check Your Vendor Lists
Sometimes, businesses may overlook the new vendors added to their master sheet or may exclude certain contractors from their tax reports for the current tax year to carry forward the profiles to the next tax year.
But keep in mind that if you have paid the independent contractors in the current tax year, then you must report all such payments in the 1099 reports for the current tax year.
This includes any last-minute adjustments and priority orders for which you may have made the payments after you have prepared your returns, and so on.
Ensure that you have verified all the onboarded vendors. This will prevent your business from burdening itself with the year-end rush (such as now for some businesses). Vendor verification enables you to verify the tax information, such as TINs. The next task will help you learn more about TIN Matching in detail.
Verify TINs (Taxpayer Identification Numbers)
When you obtain the tax information number/name combination from a vendor and check it against the official records of the IRS, you’re validating if the provided details match the real-time records of the IRS.
By verifying a TIN, you’re saving your business a ton of stress and back and forth with the vendors.
You can also verify the vendor addresses with Tax1099’s Address Validation tool.
If you don’t already have the necessary vendor TIN information, send out Form W-9 to your vendor(s) immediately. See bulk W-9 eSolicitation for a quicker response from vendors.
Remember that if you miss to report a TIN or report an incorrect TIN, the IRS will penalize your business with a $250 penalty for every TIN discrepancy.
So, make sure that you verify the TINs as received from the vendor on the W-9 forms and only validate the information as provided by your vendors to prevent miscommunications.
Validate Your 1099 Reports
After you have thoroughly verified the vendor TIN and name information, it is time to shift the focus to your transactional data. Keep a track of every single payment that went out from your business and ensure that each of those payments is reported appropriately.
The thumb rule here is that if you have made payments amounting to $600 or more to an external source (be it an independent contractor, vendor, or a freelancer, or simply, a payee), then all such payments must be reported on your 1099 forms.
Some transactions can be quite complex in nature. For example, if you have made a payment to an independent contractor and the amount has been deducted from your bank account. However, the same amount is not reflected in the payee’s bank account, and the payee refuses to have it reported on the 1099 copy, then such scenarios can be explained to the IRS with documented evidence.
But this is just one minor scenario. Many businesses come across transactions that vary in complexity and some way even spend days just discussing the details. No matter the severity, it is always a good idea to document your payment-related transactions and attach the supporting documents to well, support your claims.
Check Your Paper File Threshold
The IRS is still debating on this decision, but the updates from the IRS newsroom suggest that there might be a drastic change in the paper file threshold for certain 1099 returns. The proposed regulations would require businesses to restrict their paper files to just 100 forms (aggregating all form types). The threshold is likely to thin out further as new tax years unfold, changing the calamity of paper filing forever.
The change could be pretty drastic and would affect businesses that primarily rely on paper filing. Learn more about this update in detail here.
You can act now to prevent trouble during the filing season by migrating your paper files to electronic files. It’s not as complex as you might think and with Tax1099 by your side, you can do this quickly.
Send copies of forms to recipients AND the IRS (before due dates)
Now, many businesses focus on submitting the forms to the IRS primarily. However, there is just one other party to whom you need to send a copy of your 1099 forms – your payee/recipient.
This is especially true for 1099-MISC and 1099-NEC forms, where there is a definite regulatory relationship with another party other than the IRS and yourself.
Check the due dates in the following table and quickly file (or schedule your 1099 form eFilings appropriately)
Form 1099-MISC Due Date For 2021-22 Tax Year
|IRS Form||Filing Type||Due By Date|
|1099-MISC||Recipient Copy (With Data in Box 8 or Box 10)||Feb 15, 2022|
|Recipient Copy (Without Data in Box 8 or Box 10 )||Jan 31, 2022|
|IRS – eFile||March 31, 2022|
|IRS – Paper File||Feb 28, 2022|
Form 1099-NEC Due Date For 2021-22 Tax Year
|IRS Form||Filing Type||Due By Date|
|1099-NEC||Recipient Copy||Jan 31, 2022|
|IRS – eFile||Jan 31, 2022|
|IRS – Paper File||Jan 31, 2022|
Schedule Your eFile
If you’ve completed all the above tasks and you’re just waiting for the New Year to clock in, you don’t have to. You can simply schedule your returns with Tax1099’s eSchedule and forget about missing deadlines.
As a part of the Penalty Prevention Program, Tax1099 is encouraging its users to schedule eFiles online for the upcoming tax season to help prevent missing submissions on the due dates and late filing penalties as a result.
If you’re unsure about scheduling for a specific date, you can just select the eSchedule option and Tax1099 will automatically pick a date before the deadline (preferably at least two weeks prior) to submit your eFiles.
More convenience for you.