Managing the 1099 lifecycle can be tough. There are so many ways for errors to creep into your process, from failure to collect W-9 Forms, to faulty hand-offs to mismatched TINs - there are so many gotchas.
The experts at Abound have seen hundreds of different ways companies make taxes more complex, but here are a few of the most common mistakes:
Companies forget to collect W-9 forms at the time of establishing a vendor, contractor or seller relationship, or intentionally wait until they know who will meet reporting thresholds. Seems ok, right? Any of us who have done this a time or two know that there is always at least one W-9 you just can’t track down, forcing late submissions or asynchronous batching.
The IRS expects you to stay current on the latest forms and regulations, but this is a burdensome task and it becomes very easy to default to using the form from last year, forgetting to check for a new version.
Your contractor fills out their W-9 wrong or a typographical error occurs when you manually enter W-9 info into your systems. Your company doesn’t verify TINs in advance and now your 1099 Form is being rejected.
You expanded business operations into a new region, but didn’t realize that there were additional state reporting requirements on top of your IRS tax form submissions. You do your own tax reporting and no one caught the mistake - now you owe penalties for late reporting.
You got your form types mixed up and didn’t realize the due date for submission was in January, not March. Now you have to pay fines and do extra paperwork all over again.
It was a busy year. You don’t have a designated tax team and no one was specifically tasked with year-end tax submissions. Without a designated owner within your company, the appropriate information didn’t make it to your external tax support team and you failed to file for multiple vendors.
You knew you were in over your head so you outsourced your tax compliance to a vendor, but their technology has a lot of gaps and forces you or your team to make manual corrections and updates.
We’re not judging, we know how difficult it can be to juggle all these moving pieces. In fact, we think the challenge is so compelling that we made it our business, so you can get back to yours.
If you’ve experienced the pain of complex or insufficient tax systems, consider partnering with Abound. We ensure accuracy in your tax submissions and reduce costly errors in the following ways:
Our W-9 Drop-in Component is preconfigured to work with your system so you can easily collect W-9 information without doing the work yourself.
Payee name and TIN are automatically checked against IRS records. If a Payee provides incorrect information, you’ll be notified in the dashboard so you can prompt for correction well in advance of 1099 filings.
Status of information collected and TIN verifications are available in the Dashboard throughout the year, so when tax season rolls around, you can initiate 1099 filings with the click of a button.
Bulk upload options are available for processing information from an existing user base.
We provide digital copies automatically and support the mailing of physical copies of 1099 forms at your request.
Our all-in-one solution is laid out in an easy-to-use Dashboard, with the option to integrate with your backend.
Round the clock assistance from a team that lives and breathes 1099 compliance.
To learn more about how Abound is different reach out to partner@withabound.com or schedule a demo today.
