While you’re wrapping up 2013, give yourself the gift of reduced stress in the new year by getting a head start on January’s information reporting responsibilities. Here are three tasks to tackle.
- Review your general ledger. Even if you’ve already identified “1099 vendors” in your payables system, review current year expenses to make sure no new or infrequent payments have been overlooked. For example, it’s easy to forget that fees totaling $600 or more paid to your attorney during the year must be reported on Form 1099-MISC, even if the attorney’s practice operates as a corporation.
- Verify vendor information. Check your files for up-to-date Forms W-9, the form you use to request a vendor’s federal taxpayer identification number (TIN). In general, you should have Form W-9 on file for each vendor who provides services, even if the transaction is a one-time event. Why? Filing “mismatched” Forms 1099 — where the combination of name and TIN do not match IRS records — will result in a notice, and possibly penalties. To avoid problems, consider signing up for the TIN Matching Program, an online service run by the IRS, so you can verify identification numbers prior to filing 1099s.
- Order forms. If you plan to file paper forms this year, the copy you mail to the IRS must be on forms preprinted with scan-friendly ink. You’ll also need Form 1096, the annual summary, for each type of information return you file.
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