Have you ever wondered just how important W9s and 1099s really are for your
Recently, I was chatting with a client, and they asked, "So…how important are W9s really?"
A simple question, but it turns out they had never collected W9s from their contractors—and their previous bookkeeper hadn't thought to mention it.
If you're not already on board with collecting W9s and submitting 1099s, buckle up. This is the crash course you didn't know you needed.
Imagine this: you've wrapped up a job with an amazing contractor who helped bring your big project to life. Now they're on to their next gig, and you realize…you don't have any of their tax details.
Here's the deal: get W9s up front. A W9 form tells you all the important tax info about your contractor, like their legal name, address, and tax ID number.
Pro Tip: Get W9s before you hand over that first check, latte, or gift basket.
Once January rolls around, the IRS would love to see you submit 1099 forms for each contractor you paid over $600 in the past year. Your contractors will expect these forms too because they'll need them to file their own taxes.
A 1099 essentially says, "Hey, I paid this person money," which then flags the IRS to check that said person also reported this money.
Spoiler Alert: 1099s Are NOT Optional. The fines for late 1099s are real. Like, painfully real.
Whether you work with one freelancer or 20, you need to make sure you're sending out a 1099 to each qualifying contractor. Submit the 1099s by January 31st. Your future self will thank you.
When you consistently send out 1099s, you're saying, "Hey, I'm running a legit operation here."
W9s and 1099s aren't exactly anyone's idea of a party, but getting them done is worth the peace of mind. Add them to your list, set reminders, and don't hesitate to automate it if you can.
If you'd rather avoid the game of "Where's That W9?" our team has you covered. We'll take care of filing your 1099s and give you the lowdown on which contractors need a W9.
In Summary: Embrace the W9s and 1099s. Love them, cherish them, and treat them like the unsung heroes of your business paperwork.
Ready to get your financial system working for you? Take the free Business Financial Health Check → or schedule a free call