As a small business owner, the intensity of 1099 season is not lost on you. With the January 31st deadline approaching fast, you may be frantically trying to collect accurate information from vendors to satisfy the IRS. Moreover, keeping up with the latest tax rule changes is an added challenge.
Fortunately, you do not have to navigate this complex process alone. As the experts at Ceterus, we are ready to provide assistance to alleviate the burden of these tasks. It’s like having a financial sensei in your corner.
1099 Form Overview
The IRS uses 1099 forms to track or record payments made by individuals and certain businesses.
If your business made payments of $600 or more to non-employees, such as individuals or unincorporated businesses for services, throughout the year, you need to prepare to fill out a 1099 form.
Over 20 variants of 1099s exist, but the most common ones are 1099-NEC and 1099-MISC:
- 1099-MISC: This tax form is considered a “catch-all” for income that doesn’t fit into other 1099 categories. Generally, it is for companies that were paid over $600 and have a specific tax classification rather than individuals.
- 1099-NEC: This form reports money paid to individuals who worked for a company but were not necessarily employees. This form is typically required for freelancers or self-employed contractors rather than companies that may meet similar requirements.
News Regarding Payment Apps
In recent years, payment apps like Venmo, PayPal, and Cash App have become popular methods for conducting business transactions.
If you remember, the IRS ruled in 2022 that these third-party services are responsible for issuing the 1099s, not the businesses or individuals making payments through them.
This decision significantly simplifies the process for small businesses. Payments made through these services do not need to be tracked for 1099 purposes. Again, the responsibility for filing 1099s lies with the payment services, not the businesses using them.
But wait – maybe you’re asking yourself, “Didn’t I see something on the news or online about a delay for this new tax rule?”
Yes, you probably did!
We’re here to reassure you, though! Even though the IRS postponed enforcing these rules until 2024, these payment apps are expected to follow them ahead of schedule.
Relax, knowing you don’t have any additional paperwork to worry about!
How Ceterus Can Help With 1099 Season
We’ve designed our 1099 Manager tool within the Edge platform to make your filing process as smooth as possible.
Here’s what you can accomplish with it:
- Effortlessly manage vendor data and update W9 information.
- Confirm amounts paid to vendors in a detailed view once end-of-year books are closed.
- Review and edit any legal business info that might have changed over the course of the year.
- Easily check a vendor’s filing status and review amounts on your 1099 forms.
And the best thing about the 1099 Manager? Once you’ve collected the W9s from your vendors, all you need to do is input the information into the tool. We’ll take care of filing the 1099s for you!
Ready to simplify your 1099 filing process? Schedule a call with us today at Ceterus, and let’s navigate the tax season together.
