Simplify Your 1099 Process for 2023

Andrew Robinson, CPA
Category: Taxes

When you see a blog post about 1099s, W-2s, 401(k)s, 1120s, it probably sounds more like an anxiety-inducing random-number generator than something important.

Good news is, we’re here to break down 1099s for you.

What Vendors Require 1099s?

You need to file a Form 1099-NEC if any vendors meet these criteria:

  • They provide services (not goods) as a non-employee, including freelancers, independent contractors, and attorneys.
  • You have paid them $600 or more during the calendar year (ending December 31).
  • They are an LLC, partnership, or sole proprietorship (not a C-Corp or S-Corp). Exception: Attorneys require 1099s regardless of entity type.
  • Payments were not made via a “payment settlement entity” like PayPal, Venmo, or Stripe.

What About PayPal, Venmo, or Credit Cards?

If you pay a contractor via PayPal, Venmo, Stripe or credit card, you likely do not need to file a 1099 with them. Updates to IRS rules in 2022 carved out this exception.

What Information Do I Need?

To fill out Form 1099, collect this from each vendor:

  • Name
  • Address
  • Entity type
  • Taxpayer ID number - SSN or EIN
  • Email (if sending digitally)

Request vendors complete an IRS Form W-9 to provide this. Just email them the link or PDF version. We also created a tracking template to help.

Tax Deadlines for Delaware C Corps

If you run a startup and file your taxes in Delaware…

Screenshot this and add these tax deadlines to your calendar ‼️

Our team of experts is ready to help 👇

  • Jan 31 - File 1099 Forms
  • March 1 - File & pay Delaware Franchise Tax
  • April 15 - File & pay State and Federal Taxes (or apply for an extension)

Missing filing deadlines usually results in annoying penalties.

How Does Puzzle Help?

Puzzle guides you in identifying vendors needing 1099s:

  • Single view of all vendors in one place, regardless of payment method - peace of mind you’re not forgetting anything
  • Auto-detection of vendors more likely to need 1099s based on spending patterns
  • Review process to confirm and track 1099 vendors
  • Instructions for next steps

How Do I Actually File?

File with both IRS and vendor via online portals like Track1099 for a few dollars per filing, free providers, IRS e-file site, or by physical mail.

Need help or if you’re behind on your accounting and bookkeeping this year? Reach out to us in-app or get started here.

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Andrew Robinson, CPA
Product & Accounting @ Puzzle

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