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Smart business owners know that preparing for tax season shouldn’t wait until January. Getting your documentation organized now for W-2 and 1099 processing season can save you significant time and stress when filing deadlines approach. Disclaimer: It also saves your accounting firm significant time and stress.  

Here’s a handy list to help you get organized, so January can be a breeze for everyone. 

Gather essential information

The first order of business is to make sure you have the following details for each employee, vendor and contractor: 

W-2 preparation checklist 

Employee information 

• Legal name (as shown on Social Security card) 

• Current mailing address 

• Social Security Number 

• Employment dates (if started or terminated during the year) 

• State and local tax jurisdictions where the employee worked 

Compensation details 

• Total wages paid 

• Tips reported 

• Bonuses and other compensation 

• Retirement plan contributions 

• Health insurance premiums (if applicable) 

• Value of other benefits provided 

1099 preparation checklist 

Contractor/vendor information 

• Legal name or business name 

• Tax identification number (EIN or SSN) 

• Current mailing address 

• Entity type (e.g., individual, corporation, partnership) 

Payment records 

• Total payments made during the calendar year 

• Payment types (e.g., services, rent, royalties) 

• Dates of payments 

• Copies of all invoices

Remember critical deadlines 

• January 31: Deadline to provide W-2s to employees 

• January 31: Deadline to provide 1099s to contractors 

• January 31: Deadline to file Forms W-2 and 1099-NEC with the IRS

Plan and prepare with these pro tips 

Working closely with your accounting firm can help ensure accurate and timely W-2 and 1099 processing, minimize errors, maintain compliance and avoid potential penalties. Here are some ways to collaborate: 

1. Verify information early. 

• Ask contractors and employees to confirm their information by December 1. 

• Use the IRS TIN matching program to verify tax ID numbers. 

• Review and discuss worker classifications to ensure proper categorization. 

• Update addresses for any contractors or employees who have moved. 

2. Reconcile payments. 

• Keep digital copies of all invoices. 

• Provide detailed records of all payments made to employees and contractors throughout the year.  

• Note which payments require 1099 reporting. 

• Reconcile payments with payroll records and bank statements. 

3. Discuss details. 

• Identify vendors or contractors that operate in multiple states and ensure compliance with state requirements. 

• Set up a review and approval process to ensure timely submission. 

4. Communicate regularly. 

• Maintain open communications year-round regarding changes to employee status, new contractor relationships or significant payments. 

• Request that your accounting firm provide updates on any changes to tax laws or reporting requirements that may affect W-2 and 1099 processing. 

Get the help you need

Don’t wait until the last minute to get your documentation in order. By taking these proactive steps, you’ll set your business up for a seamless transition into the new year.  

Our team of accounting professionals can help you: 

• Review your vendor and employee records. 

• Ensure compliance with reporting requirements. 

• Set up systems for better tracking in the coming year.   

Contact us today to schedule a year-end review and make tax season smoother for everyone.