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Get ready for 1099 season in the US

If you are a US based or tax registered business, you must send out a Form 1099-MISC to each non-employee person to whom you’ve paid more than $600 for work during the year. These are usually referred to as contractors. Form 1099-MISC must be delivered to the contractor by January 31, 2014 for tax year 2013 and also sent to the IRS by the end February, if you’re sending paper, or by April 1, 2014, if you opt to e-file. Complete instructions from the IRS for 1099s are found here and here.

Here are our top tips for making 1099’s as easy as possible:

1. Get your contacts in order
Not all contacts will need to be sent 1099-MISC forms. If you have not already done so, create a new contact group (e.g.‘1099 Vendors’) for applicable contacts that should receive a 1099-MISC and add them to this group. You should also ensure contact information, including tax ID number and email, are filled out for each one. Further details are in our 1099 help guide.

Keeping Vendor contact records up to date and grouped correctly during the year will be a huge help when it comes to 1099-MISC filing.

2. Remember the key dates
January 31, 2014 – 1099 forms delivered to contractors
February 28, 2014 – 1099 copies and 1096 due to the IRS, if filing by paper
March 31, 2014 – 1099 copies due to the IRS, if filing electronically. No 1096 needed.

3. Go paper-free
Xero Add-ons like Track1099 make your life a lot easier and allow seamless e-filing and e-delivery of your 1099-MISC forms.

Here is a short video on e-filing 1099’s from Xero with Track1099:

Tax pros can even handle multiple clients using Xero’s integrated 1099 Add On with Track1099.
Xero clients receive a 5% discount when using Track1099 this tax season.

There are two Xero certified 1099 Add-ons: Track1099 and Tax1099. If you are filing by other means, use the csv export option on the 1099 report.

Following these three steps should make 1099s a little more tolerable – and even better – our Xero Training team offers free webinars for a start to finish look at how you can process 1099s in Xero. Sign up here to reserve your seat and until then, let us know if you have any other tips or tricks on making 1099 season as painless as possible with Xero.

 

Read more about Accountants, Add-ons, Tax, US

 

6 comments

Peter
18 December 2013 #

does this relate to NZ???

Peter Morgan
18 December 2013 #

Hey Guys – your blog is getting less user friendly as more stuff specific to one or other jurisdiction is gettign posted. Can only see more issues as Xero globalises further.

Ronan Quirke
18 December 2013 #

@Peter & Peter, on behalf of the other Peter – as an Irish person living in New Zealand assisting add-on partners with things like US tax filing, I can certainly sympathise that things can get confusing in a globalised world.

I’ve tweaked the intro paragraph to make the intended audience a bit clearer (Peter Wen in the US team will be on his way home by now).

Longer term, we probably do need to find a way to make sure the blog content stays more relevant as we become more global, will raise this with the blog team.

Appreciate the feedback.

Roger
8 January 2014 #

Last year we ran into a little problem filing 1099s through Xero. The issue is that we use the pay run feature to pay our regular contractors, and we couldn’t get the ‘employee’ contact in Xero to go into the integrated 1099 feature. Is this still an issue?

Thanks!

Sid Maestre
14 January 2014 #

@Roger

According to the docs … http://help.xero.com/us/#Report1099

The 1099 report:

includes paid US currency bills and spend money transactions (including overpayments and prepayments)

So it will not include pay run payments. Your contractors would need to be set up as suppliers and bills, not employees and pay runs.

Thanks
Sid

Kelly
21 January 2014 #

why do I need the vendors email address. I do not have it for most contacts and I want to look at the list and know what contacts have actual missing details like the ID number, not the email address. Is there a way to remove that requirement form the missing details?

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