Finance News & Insights

4 proven strategies to avoid the new 1099 penalties

With every second that passes, the year-end deadlines creep closer.  

And now that IRS has increased the penalties for inaccurate and late 1099s, efficiency is everything.

Fortunately, you’re not alone. Finance pros all over the U.S. are using creative techniques to handle the 1099 season.

And we’ve got the inside scoop on what they’re doing.

What other companies are up to

Here are a few ideas from you can steal:

1. Protect your data. Your vendor and payment data accuracy becomes extra important at the end of the year. That’s why Robin, an accounting manager in Minnesota, makes all of her year-end-related files read-only in January.

This keeps her and her team from accidentally changing anything.

2. Pay attention to the little guys. Now’s the time for “B” Notice preventative measures. Because of that, Senior Accountant Dinah from Arizona makes a point of getting in touch with her small vendors – like sole proprietors and mom-and-pop shops – this time of year.

She’s learned from experience that these companies undergo the most changes – and have caused her “B” Notice headaches in the past.

3. Drop paper mail. With the Jan. 31 deadlines this year, every second counts. Wesley, an accounting and finance manager in Kentucky, gives his staffers every last second by having the company’s 1099s go into a vendor portal.

That way vendors can log in to see their 1099s – and there’s no need to use the mail.

Uploading only takes a few minutes, and A/P can wait until the last second to finish them.

4. Make a deal. There’s plenty of manual tasks involved with 1099s. To get out the door quickly, Jennifer, an A/P team lead in Georgia, asks other company accountants to chip in with A/P’s tasks like stuffing envelopes.

In return, she promises to help them in the future when they need a hand.

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