1099 season is short and brutal. Most 1099-NEC forms are due to recipients by January 31, with copies to the IRS by the same deadline if filing electronically. For bookkeepers handling 1099 prep for client firms, this means roughly 30 days between year-end and filing — with the bulk of the work happening in early January.
This guide covers the practical workflow for 1099 preparation. Note: this is informational only — specific 1099 obligations depend on your client's situation, and you should consult a tax professional for guidance on specific filings.
Short version: Identify 1099 vendors, gather W-9s, calculate total payments per vendor, file electronically. The most common mistakes are misclassifying contractors as 1099-eligible when they're not, or missing W-9s for vendors who were paid over $600 during the year.
Who gets a 1099
The general rule (verify with a tax professional for specific cases):
- 1099-NEC goes to non-employee contractors paid $600+ during the calendar year for services rendered. Most independent contractors fall here.
- 1099-MISC goes to recipients of rent, prizes, awards, medical payments, attorney fees, and similar non-NEC payments.
- Payments to corporations generally don't get a 1099 (with exceptions for attorneys and some medical payments).
- Payments made via credit card or payment platforms (Stripe, Square, PayPal Business) don't require a 1099 from your client — the platform issues a 1099-K.
The corporate exception is where many 1099 mistakes happen. Confirm a vendor's entity type before excluding them.
Step 1: Pull the vendor list from QBO
In QuickBooks Online, go to Expenses → Vendors. The vendor list shows total payments per vendor for any date range. Filter to the calendar year and identify vendors paid $600+ for services.
Common patterns to look for:
- Independent contractors, freelancers, consultants
- Repair and maintenance vendors
- Marketing agencies (if sole prop or LLC), accountants, attorneys
- Subcontractors
Step 2: Gather W-9s
For every vendor who needs a 1099, you need a W-9 on file. The W-9 confirms the vendor's tax ID, legal name, and entity type. Without it, you can't file an accurate 1099.
If your client hasn't been collecting W-9s as part of their vendor onboarding, January is the panic month. Send W-9 requests to every potential 1099 vendor as early as possible. Some won't respond — in that case, your client may need to either backup-withhold or take other action; consult a tax professional.
Step 3: Calculate total payments per vendor
QBO has a built-in 1099 contractor list (Vendors → 1099 Contractors) that tracks payments by year. Verify the totals match what the vendor expects to receive on their 1099.
Things that should NOT be included in the 1099 total:
- Payments for goods (only services trigger 1099-NEC)
- Payments made via credit card or payment platform (those flow through 1099-K from the platform)
- Reimbursements of expenses, if substantiated
Things that SHOULD be included:
- Cash payments
- Check payments
- ACH and direct deposit payments
- Bill payment service payments
Step 4: File the 1099s
For each filing, three things need to happen:
- Send a copy to the recipient by January 31
- File with the IRS by January 31 (electronic) or February 28 (paper, for some forms)
- File with relevant state agencies if your client's state requires it
Most bookkeepers use a filing service (Tax1099, Track1099, Yearli) that handles all three with one workflow. QBO has a built-in 1099 filing feature for E-filing through their partnership.
Common 1099 mistakes
1. Missing W-9s
You can't file an accurate 1099 without the recipient's name, TIN, and entity confirmation. If you don't have a W-9, request one immediately. Discuss with a tax professional how to handle missing W-9s.
2. Issuing 1099s to corporations
Corporations (including S-corps and C-corps) generally don't get 1099s. If your vendor list includes "ACME Inc." or "Smith Corp." and you've issued them a 1099, you've over-filed. The recipient will be confused; the IRS will accept it but it's unnecessary work.
3. Double-reporting credit card payments
If a vendor was paid partially via check and partially via credit card during the year, only the check portion should appear on the 1099-NEC. The credit card portion goes on the 1099-K from the card processor.
4. Missing the deadline
Penalties for late 1099 filing start at $60 per form and scale up with delay. For a client with 50 contractors, late filing can cost thousands.
The bookkeeper's 1099 calendar
| When | Action |
|---|---|
| October-December | Audit vendor list, request W-9s from any missing |
| January 1-15 | Confirm payment totals, address W-9 gaps |
| January 15-31 | File 1099s, send recipient copies |
| January 31 | Deadline for both recipient delivery and IRS e-filing |
For ongoing client work
The single best thing you can do for next year's 1099 season is to enforce W-9 collection at vendor onboarding. Don't pay any new vendor until you have their W-9 on file. This eliminates the January scramble.
For more on closing the year cleanly, see our year-end cleanup checklist.