1099s
It seems like everyone avoids dealing with taxes until the last minute. Having to go through all that paperwork just dosen’t seem like fun. By law you have to send out 1099s to your contract/non W2 employees by the end of January. But it seems like very few people follow that rule. Over the years I’ve received 1099s as late as March, just days before I was meeting with the accountant to file my taxes. I have no interest in breaking any laws. Getting audited just seems like a nightmare.
As a freelancer I’ve received many 1099s from companies over the years but this is the first time I had to send out 1099s for LooseKeys. So I wanted to share my first time experience with the hopes of helping out others. I picked up the 1099 documents at Staples, there is a large display with pretty much all the documents you need. You can also order them from the IRS website, I’m not sure if they are free or not. Save the ink and pick up a pack from an office supply store and don’t just print them online. The official printed version of the IRS form is scannable, but if you find one online and print it from a website yourself it is not. A penalty may be imposed for filing forms that can’t be scanned. Just cough up the $20 for a package at Staples or Office Max. Avoid any chance you have for incurrent filling. When I first went to Staples I didn’t know there were different 1099s and just grabbed the first one I saw. Which was the 1099-R. Those are used for distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, and Insurance Contracts. After realizing those weren’t correct, I headed back to Staples and grabbed the 1099-MISC. All set, I began adding up all the checks I had wrote to all the talented people who worked with LooseKeys over the last year. I started using Quickbooks late into the year and all my numbers weren’t there. You can count on me keeping better track with tools like Quickbooks, Mint and Lemon this year. It would be much easier then flipping through checkbooks and adding up invoices. I think that’s the main reason people avoid doing taxes and sending out the correct documents on time. Once I had the right paperwork and the totals, it was very easy. Just fill in the correct boxes and make sure there are no typos. There was one box in the 1099 that threw me for a loop, it was the State Identification Number. I noticed on previous 1099s that I had received from other companies in the past, that this box was filled out. But after talking with the accountant, I discovered that no state number is required for 1099s. I’m not totally clear why but I’m going to go with what the accountant told me, she knows what she’s doing. Well now 1099s have been stamped and mailed out. I have a few documents that I need to send to the IRS by the end of February. And that was it, pretty painless.
I was a bit worried about dealing with 1099s this year since I hadn’t had to before but as of right now, everything seems to be pretty straight forward. Hopefully I didn’t forget anything and I don’t have the IRS knocking on my door later this year. Yikes!
