A lot of people assume April is the most stressful time for accountants, but if you specialize in accounting for small to medium-sized businesses, January can be just as bad.
Come the New Year, your clients have barely closed their books and they have to scramble to distribute their 1099 forms by the end-of-month deadline. And if your clients are scrambling, you probably are too.
Here's a trio of tips to help you protect your sanity when filing that flurry of 1099s:
1. Get Clients to Focus on 1099s All Year Long
The 1099 season was bad enough when clients had a cushion between the filing deadline for distributing 1099s to vendors and the filing deadline for the IRS. Starting in 2016, though, employers had to submit 1099s for "non-employee compensation" (a.k.a. "box 7") not only to their independent contractors but also to the IRS by the same deadline, January 31. That's eliminated any margin for error.
Now, it's more important than ever to get ahead of the game, particularly with clients who are disorganized or have a tendency to procrastinate. Insist that each of your clients secure a W-9 form from every vendor or independent contractor from day one. In fact, they should make that a condition: no W-9, no check.
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It's not too much to ask. No accountant can perform the job adequately without the necessary records.
About Jeanne Richards CPA
Jeanne Richards, BA, CPA is Director of Service Excellence and has over 15 years of accounting experience working in both public and corporate accounting. She started her career at KPMG Peat Marwick, where she was involved in the management of client audit engagements.