What information do I need to collect before I can issue a 1099?
You need a Form W-9 from each contractor you pay $600 or more during the year. The W-9 collects the information required to prepare and file their 1099. That includes their legal name or business name, taxpayer identification number (either a Social Security Number or EIN), mailing address, and entity type.
The legal name and TIN are what matter most. The 1099 form reports payments to the IRS, and the IRS matches the name and TIN against their records. If either is wrong, the filing gets rejected and you may face penalties.
Collect the W-9 before you make the first payment, not at year-end. This accomplishes two things. First, you avoid chasing down contractors in January when you’re trying to meet the filing deadline. Some contractors disappear after a job ends or simply don’t respond quickly. Getting the W-9 upfront means you already have what you need when it’s time for 1099 preparation.
Second, if a contractor refuses to provide a W-9, you’re required to withhold 24% of their payments and send it to the IRS. This is called backup withholding. You can’t comply with backup withholding rules if you don’t ask for the W-9 until after you’ve already paid them.
Store W-9s in a consistent place. A folder on your computer, a shared drive, or within your bookkeeping system. When January arrives, you’ll pull these forms to get the correct names, TINs, and addresses for filing.
If you’re already behind, start asking now. Send a simple request explaining you need the form for tax reporting. Most contractors understand because they receive the same requests from their clients. For contractors who don’t respond, follow up before year-end while they’re still thinking about the work they did for you. Working with Long Island bookkeeping services throughout the year makes this easier because contractor information gets tracked as payments are made rather than reconstructed months later.
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