30 Minutes Now to Save Hours Later with Employees and Subcontractors

13 Nov 30 Minutes Now to Save Hours Later with Employees and Subcontractors

Tax time can be a bear especially if you have paid other people for their services over the course of the year.  The two classifications of payments to people for services are employee wages or independent contractor payments.  If you own a small business you probably have at least one independent contractor payment during the course of the year.  Many small businesses have at least one employee on payroll even if it is just the business owner.  So when it is time for 1099 forms and W-2 forms many small businesses find themselves with lots to do.  Here are a few easy things everyone can do before the end of the year to make things easier on themselves.

1. Have employees review and confirm the information your payroll processor (hopefully you have a payroll company) has on file for them.  Name, address, social security number being the most important.  Verifying this information now will avoid W-2 forms that are rejected by the IRS or returned by the post office and save you time and money.  Save time and money by avoiding having to reissue the form with corrections.
2. If you don’t have a payroll company make sure you have your W-2 Forms including the State and Federal remittance copies along with the employee and employer copies.
3. Make sure you have a W-9 form for each of your independent contractors.  Not having a proper business name, address, and tax i.d. can be a nightmare after January 1st.  You should always try to collect the information before they provide the services but if you didn’t correct it now.
4. Verify that the information provided on the W-9 independent contractors have provided is in your Quickbooks file or your 1099 software correctly.  Returned and reissued 1099s cost time and money.
5. Count how many independent contracts you will need to issue 1099 forms for and order now.  Don’t wait until the office supply stores are all out of forms.  Forms are issued for each year and suppliers only buy limited amounts to avoid overstock that has a limited shelf life. 1099 forms are printed with special ink that is read by the US treasury machines so you can’t print more out as you need them.
6. If an non-employee of your company is preparing your W-2 or 1099 forms, such as a bookkeeper or personal assistant, make sure they have obtained a PTIN from the IRS and are registered to prepare non-1040 tax forms.  Finding a registered person last minute could be trouble.