3 Things Business Owners Should Do by January 31
By Elizabeth Chesney
It happens every year: We celebrate the new year and then suddenly it’s mid-January. Thankfully, you still have time to complete a few must-do tasks—including the processing of Form 1099s by the January 31 deadline—before the month completely disappears.
Here are three things every business owner should do before January 31.
1. Clean up your vendor list.
Just like you might clean your desk for a fresh start, now is a great time to tidy up your vendor list. This includes merging duplicate vendors, updating addresses, and checking for inaccuracies.
2. Request Form W-9 from your vendors.
If you haven’t requested a W-9 from your vendors, consider doing so ASAP. Best practice calls for having a W-9 on file for every vendor in the event of an audit, so it’s wise to start the year off right.
3. Process Form 1099s by January 31.
Form 1099s are used to report income that falls outside of Form W-2. There are several types of Form 1099s; the one you need to know about is Form 1099-NEC.
You’ll need to prepare and send a 1099-NEC to any vendor that provided a service to your business of $600 or more by January 31. You’ll also need to file a copy with the IRS by this same deadline.
Vendors that might receive a 1099 include:
- Trash collectors
- Marketing consultants
- Custom art providers
- Construction contractors
You do not need to process a 1099 for C corporations and S corporations. You also do not need a 1099 for advertising media purchases, rent for storage units, and purchases of tangible items.
Dreading 1099 prep? QuickBooks can help!
Did you know you can process 1099s directly in QuickBooks? Of course, you must have your vendors and projects set up correctly for this to work; however, using QuickBooks can make this task much easier.
Let Abdo guide you forward.
Whether you have questions about the forms we mentioned or want to learn how to process 1099s in QuickBooks, Abdo can help. Our advisors are here to guide you through these critical tasks and into a successful new year. Contact us today to learn more.
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