Tag Archives: 1099 preparation

Tips For Small Business Owners For The Upcoming Tax Season

If you are a small business owner, then odds are good you wear a million hats. Operating a small business requires hard work and a lot of focus. From ensuring day-to-day operations are running smoothly to handling big picture items, such as the future goals of your business, it is no easy feat to effectively manage your small business. One big task that many small business owners loathe but is a necessary evil is correctly filing taxes. For small business owners, tax season can be a flurry of activity and can begin to feel downright chaotic.

Before tax season is fully upon us, take the time to consider the following tips that will help you prepare. Here at OnlineFileTaxes.com, we make it easy to file 1099s through our online platform. Read on to find out how this, as well as our other tips and tricks, can make your life easier in the 2019 tax season.

Get Organized Early


When it comes to filing taxes, the more organized you are, the better. Make sure that from the start you are keeping everything you will need organized. Do you find yourself simply throwing receipts and paperwork into a pile on your desk? Do you have a filing cabinet that is overflowing with papers that are haphazardly organized? Take the time to straighten out all your paperwork and set in place a system to keep things in order.

Due to the amount of paperwork you will undoubtedly have as a small business, it is wise to turn as much of your paperwork into digital documents as possible. Storing your information in a digital format will make it easier to stay organized and prevents you from drowning in a sea of papers. Make sure that you keep everything in an order that is simple for you to weed through later. For example, all your receipts should be kept in one location, sorted by date. If you have employed contractors, freelancers, or other non-employee workers, store all their information in one easy-to-access location. Whether you keep hard copies of everything on hand or you store things online, make sure your system is simple and easily navigable. By keeping your paperwork organized throughout the year, you can save yourself from a massive headache when tax season is in full swing.

Be Sure You Understand Your Responsibilities

Taxes for small business owners can be a confusing thing. There are a myriad of complexities surrounding what you need to file and what you will owe. If you are not an expert in taxes, take the time to learn more so you are confident that you know your responsibilities come tax season. Reach out to a local CPA to get advice or spend a day researching on your own. Create a list of questions you have or areas of confusion. Dig until you find the answers you need.

In many cities, local libraries will offer free tax services where you can meet one-on-one with a tax expert. Bring in a list of questions and find out everything you need to know long before tax season arrives. This will help you better prepare ahead of time and will prevent you from feeling at a complete loss when your taxes are due. By ensuring you understand your responsibilities, you can save yourself time and money in the long run.

Tackle Projects In Steps


Filing taxes as a small business owner can feel like an overwhelming task. If you are staring at mounds of paperwork in your office and you realize you have a ton of research to do before you are equipped to file your taxes properly, take a deep breath and bite off small pieces of the project at a time. Instead of spending a whole day drowning in receipts, tax forms, and paperwork, block out small chunks of time each day for a week to handle one component of the project.

For example, one day you can spend a few hours organizing all your receipts. Another day you might spend doing research on local laws for filing taxes as a small business owner. By tackling the project in steps, the task will be less overwhelming and you will be less frazzled leading to fewer mistakes.

Streamline The Filing Process

The good news is that with the advent of technology, a lot of tasks that were once manual and time-consuming can now be streamlined. If you can improve your efficiency by utilizing online tools, by all means, do so! For example, 1099s for small business owners can all be filed online through our service at OnlineFileTaxes.com. Instead of downloading and printing out dozens of 1099s and then manually filing them with the IRS, you can quickly do it all through our online portal. Once you fill out the information online, the 1099s will automatically be filed with the IRS electronically for you. You will receive a copy of the form for your own records, which will be easy to access online at any time. The 1099 will also be automatically mailed out to the appropriate recipient, saving you yet another step.

By utilizing efficient technologies, such as OnlineFileTaxes.com, you can save yourself an immense amount of time and hassle. Instead of being buried in paperwork, spending hours upon hours filling out lengthy forms, you can quickly accomplish the task, freeing your time for other important pressing matters. As a small business owner, your time is invaluable, so be sure to implement as many streamlined methods for tax filing as you possibly can.

Assess For Next Year

Finally, take the time after you are finished with tax season to assess what could be done better next year. Did you struggle with organization, making it difficult to find the paperwork you needed when it came time to file your taxes? Did you make the mistake of manually filing all your 1099s, creating a headache? Take note of any areas you could improve in and set up a better system for the following year.


Interested in making the process of filing 1099s simple? Sign up to utilize OnlineFileTaxes.com today and save yourself time and money. With our easy-to-use platform, you can file all your 1099s in no time at all from the comfort of your computer.

Everything You Need to Know About 1099 Preparation

Are you a freelancer or independent contractor? Depending on how much work you’ve done, you could be receiving a 1099 form down the road. But what exactly is a 1099 and why is it important?

Let’s take a closer look at these forms.

The Basics of a 1099 Form


Just because you’re a freelancer or independent contractor doesn’t mean you’re exempt from tax implications. Basically, 1099 forms report to the Internal Revenue Service how much a company has paid you in the last tax year as a “non-employee.” Think of this documentation as an alternative to W-2 forms, which organizations use to declare income for employees.

We are often asked what specifically defines an independent contractor. Here’s the thing: you become eligible for a 1099 when you work and perform services for a company as opposed to being a direct employee. For the most part, an independent contractor can dictate their schedule, choosing when and how often they want to work.

Did you recently sign up to be a driver for a ride-sharing company? Are you doing freelance design work for a friend’s business? In both of these scenarios, you would qualify as an independent contractor and, consequently, would be eligible for a 1099.

Here’s where things get a bit dicey. If a company has paid a freelancer less than $600 over the course of a year, there’s no need to send the independent contractor a 1099. However, the freelancer must still account for the income when doing their taxes.

How to Prepare Your 1099s


Now that you understand the basics of a 1099 form, let’s dive into 1099 preparation from an employer’s perspective. Here are some tips for making sure this documentation is on par with what the IRS wants:

Verify your information

image1QuickBooks explains the importance of having correct information on your contractors. Ideally, you should have already filled out a W-9 for each freelancer, which includes their name, address, and Social Security number. Don’t be afraid to ask your independent contractors if any of their information has changed.

So what happens if a contractor fails to provide a W-9 or left out pieces of information? According to the IRS, you are allowed to withhold 28 percent of their pay. This is what’s known as “backup withholding” in the tax world.

Get your 1099s

image2Now you’re ready to obtain those 1099s and get started. One mistake to avoid here is using a downloaded form or even a sample from the IRS. Instead, you must use forms that are readable by the IRS scanner that process 1099s.

Maybe you’re thinking, “This sounds like more of a hassle than anything else.” Here at OnlineFileTaxes.com, we agree that obtaining 1099 forms can be complicated. We’ll circle back to this idea later in the post.

Fill out the forms

image3This is likely to be the most time-consuming step of the process. Each 1099 form should include your Federal Tax ID number, as well as the contractor’s information. Be sure to also enter the amount of money paid to the contractor, which is entered in Box 7 under “Non-employee compensation.”

The last piece is filling in the contact information forms. As aforementioned, manually filling out 1099s can take up a good chunk of time. That’s why we recommend using an e-file provider such as OnlineFileTaxes.com.

Send out the forms


After spending precious hours (or days) filling out 1099s, you’re ready to send them out and get back to running your business. The deadline for mailing or handing copies to independent contractors is February 1.

Should you fail to meet this deadline, you could face some hefty IRS penalty fees.

Keep copies for your records

Copy C is meant to be kept for your records. While you may not want additional paperwork in your office, it’s essential to have these records available in case there are questions. The last thing you want is to be contacted by the IRS regarding a contractor’s 1099 and not have your own copy of the form.


How We Can Assist With 1099 Preparation


Whether you’re a business owner, CPA, accounting professional, or an independent contractor, chances are you’ve thought about e-filing 1099 forms. Doing so saves time and allows you to focus more on your work. But with so many 1099 preparation services out there, how do you really know which is best for you?

More people are using OnlineFileTaxes.com than ever before and it’s no secret why. With our unique, easy-to-use system, you can e-file 1099 forms in just minutes. Your files are sent to the IRS for fast, efficient, safe, and, of course, simple filing.

Let’s take a closer look at some of the benefits of OnlineFileTaxes.com:

  1. Process any number of forms – Whether you need to process one 1099 or hundreds,onlineFileTaxes.com makes a great resource.icon1

  2. Remove the need to buy and fill out lengthy forms – Who really has the time to do this anymore? Maybe you’re a business owner and a parent. You shouldn’t have to put off valuable family time just to manually complete 1099s. Thanks to our automated filing system, you can focus less on tax documentation and more on enjoying your family.icon2
  3. Eliminate the need to invest in any software – It might seem convenient to grab the latest tax software and call it good. However, these products can certainly be pricey. Not to mention, you have to purchase the newest version every year. With OnlineFileTaxes.com, there is no expensive software to worry about.icon3
  4. Eliminate the administrative and IT costs associated with year-end 1099 processing – You’re a savvy business owner who watches over finances like a hawk. It’s no secret that 1099 processing can cost a pretty penny. There has to be a more affordable option, right? Well, signing up for OnlineFileTaxes.com is absolutely free. Users can print, mail, and e-file 1099s for as low as $1.25 per form. That’s quite the steal if you ask us.icon4

  5. Print, mail, and electronically file with the IRS once you fill out your forms – At OnlineFileTaxes.com, we want your experience to be a stress-free one. That’s why we make it easy to print, mail, and electronically file with the IRS. We even print and mail recipient copies for you to keep for your records. You won’t find a more straightforward e-filing service.icon5


E-File Various Tax Forms With Us


When it comes to filing Form 1099 online, there’s no better system than OnlineFileTaxes.com. Keep reading to learn about 1098, 1099, and W-2 forms.

Form 1099-MISC


We touched on this documentation earlier, but it’s worth explaining a bit more. Form 1099-MISC reports commission paid during the year to an individual (usually labeled a freelancer or independent contractor) who is not an employee. We have found this specific form to be the most common 1099.

Form 1099-DIV


Wondering if there’s a tax form used to report dividends and distributions paid to a person? Then it’s imperative to e-file Form 1099-DIV. You must file this form if you paid to a person:

  • To whom you have paid dividends and other distributions on stock of at least $10

  • For whom you have withheld and paid any foreign tax on dividends and other distributions on stock

  • For whom you have withheld any federal income tax on dividends under the backup withholding rules

  • To whom you have paid at least $600 as part of a liquidation

Form 1099-INT


This form reports interest paid during the year to an individual whom you have paid at least $600 in interest. In addition, Form 1099-INT reports specified private activity bond interest and federal income tax withheld, if applicable.

From 1099-B


This form is used to document proceeds from broker and barter exchange transactions. More specifically, Form 1099-B reports such proceeds for each person for whom the broker has sold any of the following:

  • Stocks

  • Bonds

  • Commodities

  • Regulated futures contracts

  • Foreign currency contracts

  • Forward contracts

  • Debt instruments

Form 1099-C


Form 1099-C revolves around the cancellation of debt. It must be filed for each debtor for whom a debt owed is at least $600 if the debtor is an individual, corporation, partnership, trust, association, company, or estate. The IRS requires Form 1099-C be filed regardless of whether the debtor is required to report the debt as income.

Form 1099-R


Form 1099-R reports distributions from pensions, annuities, retirement plans, and insurance contracts for each person to whom you have made a distribution or are treated as having made a distribution of $10 or more from such plans.

Form 1099-S


Form 1099-S reports the sale or exchange transaction for money, indebtedness, property, or services of any ownership interest in land, permanent structures, buildings, etc. In simpler terms, this form accounts for any proceeds from real estate transactions.

Form 1098


This form is used to report mortgage interest of at least $600 received during the year via trade or business from an individual, including a sole proprietor. Keep in mind that the $600 amount specified in Form 1098 applies separately to each mortgage.

Form 1098-T


This form is used for each student enrolled and for whom a reportable transaction is made. If the insured received any sort of refund or reimbursement of qualified tuition, Form 1098-T must still be filed.

Form 1098-MA


Form 1098-MA provides information to the IRS, as well as homeowners, regarding mortgage payments made with funds allocated from the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets.


File Your 1099 Electronically

If you’ve never used a service for filing, now is a great time to start. OnlineFileTaxes.com offers the most cost-effective way to e-file 1099s and other essential forms.


What You Should Know About 1099s

Tax Day has come and gone once again.

As a taxpayer, we’re willing to bet that you hate putting together documentation for Uncle Sam. Obviously, though, it’s something every taxpayer must do.

We thought it would be beneficial to focus on 1099 preparation in our latest blog post. More specifically, what should the average joe know when they go to file 1099 forms next year?

Let’s take a look:

  1. There are countless varieties of 1099 – The accompanying infographic explains this in greater detail, but it’s also worth touching on in this list. There’s a 1099-DIV for dividends, a 1099-INT for interest, a 1099-R for pensions and retirement payouts, a 1099-S for real estate transactions, and more. Interestingly, the one that’s most common (Form 1099-MISC) seems to be the most challenging for taxpayers. The takeaway here is that not all 1099 forms are the same.

  2. Timing is important – Taxpayers had until January 31, 2018 to file 1099s for the 2017 tax year. For future reference, some businesses send out their 1099s at the same time they mail pay stubs so they don’t have to send a form later. That’s why it’s a good idea to always look out for 1099s. Maybe you’re wondering, “What if I don’t receive a copy of my 1099 form by February or March.” Well, don’t just assume you’re in the clear. Believe it or not, some businesses don’t issue 1099s until well into April or May. This is certainly something to keep in mind if you’re accustomed to filing taxes early.

  3. The Internal Revenue Service receives them also – The majority of businesses send 1099s to the IRS at the same time they mail forms to taxpayers. It’s just easier that way, right? Other payers get the necessary documentation to employees, allow some time to collect copies, and then transmit this information electronically to the IRS. Why is this worth mentioning? Here’s the thing: while you may think you can hide earnings information from big brother, you really can’t.

  4. Report errors as soon as possible – It’s one thing to keep every 1099 in a neatly organized pile. That said, do yourself a favor and open these forms immediately after receiving them. Reporting errors happen every once in a while. The last thing you want is to see $10,000 on an issued 1099-MISC when you know you only made $1,000 from the company that sent the form. Tell the company immediately if this occurs.

  5. Report every 1099 – It goes without saying that you can’t ignore a 1099 form. Keep in mind that the IRS matches every single 1099 form with your tax return. Do you think a particular one should be canceled? Then make it a point to explain why on your return.

File 1099 Online

Handling 1099 documentation can be more of a hassle than anything else. That’s why more taxpayers are choosing OnlineFileTaxes.com.

We are proud to offer the most cost-effective way to efile 1099 forms.

With OnlineFileTaxes.com, you can process hundreds of forms in a way that’s seamless and economical. Our system is ideal for businesses, CPAs, accounting professionals, and individuals alike.

Sign up for free!


Why You Should Use OnlineFileTaxes.com

We don’t know many people who actually enjoy doing their taxes. But if you’re the owner of a business, an accounting professional, or self-employed, 1099 preparation is a big deal. OnlineFileTaxes.com is proud to be an IRS-approved e-file provider. We take the hassle out of filing your 1099 forms. With our online tax reporting service, you can e-file 1099 forms and other documentation in minutes. Say goodbye to wasting valuable business days manually going through one 1099 after another. With OnlineFileTaxes.com, your files are electronically sent to the Internal Revenue Service quickly and efficiently. For your convenience, we also print and mail recipient copies for you to keep in your records. Keep reading to learn more about our service and how OnlineFileTaxes.com makes sense for your situation.

File 1099 Forms With Ease

Whether you have just one copy of a 1099 form to file or hundreds, we invite you to take advantage of our services. So what makes OnlineFileTaxes.com unique? Well, let’s start with the fact that our do-it-yourself software allows you to effectively manage all of those tax forms. Plus, since we e-file 1099 forms, a 1096 isn’t necessary. As long as you get your completed documentation in by the end of March, then it will be filed on time. Pretty cool, right?

Our Pricing to E-File 1099 Forms

It’s our belief that you shouldn’t have to pay a premium price to have someone handle your 1099 forms. Please note that our default service option includes e-filing, as well as printing mailing recipient copies. Here are a few other options available through OnlineFileTaxes.com:

  • E-file only – Maybe you have already provided us with recipient copies and simply want us to report to the IRS. If that’s the case, then this is the option for you.

  • Print and mail only – Some businesses and individuals prefer that we print and mail recipient copies. For example, let’s say you already submitted your information to the IRS but would like OnlineFileTaxes.com to provide hard copies to recipients. You can count on us to customize a solution to fit your needs.

  • TIN checking – Should you report a wrong TIN number for your recipients, you could face serious penalties. OnlineFileTaxes.com can help you be proactive in this area. It’s important to know that we are an IRS-approved TIN check provider. If you’re interested in this service, we will confirm the number before submitting to the IRS. Please don’t hesitate to reach out to us with questions regarding TIN checking.


What Others Say About Our 1099 Preparation

OnlineFileTaxes.com will e-file your 1099 forms for as low as $1.25 per form. Frankly, if you’re looking to save time and money on your taxes, choosing OnlineFileTaxes.com is a no-brainer.

Take it from Jennifer Schubert-Akin of Manhattan Accounting Services, LLC in Colorado, who says, “I highly recommend OnlineFileTaxes for your 1099 e-filing needs. There’s no need to buy expensive forms and stuff envelopes. It’s secure, accurate, fast, and affordable…and better than Intuit’s e-file service.

It’s time to take control of your taxes. Start filing today.

Tips for Filing 1099-R

Form 1099-R is a U.S. Internal Revenue Service form that’s used to report distributions from pensions, annuities, retirement/profit-sharing plans, IRAs, and insurance contractors for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans. This could also include any individual arrangements, annuities, pensions, insurance contractors, survivor income benefit plans, permanent and total disability payments under life insurance contractors, charitable gift annuities, etc. Keep reading for 1099-R filing tips from OnlineFileTaxes.com.

  1. Your taxable amount may not be fully ‘taxable-focus’ on Box 2a – Usually, your plan administrator must reflect the taxable amount of your distribution in Box 2a. Be aware that the following are non-taxable transactions, which would be reported in Box 1, but not Box 2a:

    1. Direct rollovers between qualified plans, 403(b) plans, 457(b) plans, traditional IRAs, and simple IRAs
    2. The principal on a return of excess contribution from an IRA that’s removed by the deadline (the excess amount and earnings are reported in Box 1, but only the earnings are reported in Box 2a)
    3. Any recharacterized IRA contributions or Roth conversions
    4. Distributions of after-tax amounts from qualified plan
  2. You will need to apply the non-taxable treatment on your return if an amount is reported in Box 2a – Let’s look at an example of this. You receive a rollover eligible distribution and you rolled over the amount within two months. The IRS requires that you report such amount on Lines 15a and 15b if the distribution was made from an IRA or Lines 16a and 16b if the distribution was made from a qualified savings plan. Maybe you receive a distribution of $15,000 from your traditional IRA last year, but you rolled over the amount within the allocated 60 days. The issuer of your 1099-R must report the amount as taxable. When you file your return, be sure to do the following:

    1. Enter $15,000 on Line 15a

    2. Enter ‘rollover’ next to Line 15b

    3. Enter ‘0’ on Line 15b

  3. Non-taxable amounts are attributed to after-tax contributions made to your qualified plan – Here’s the thing: If the distributions were made from a qualified plan or 403(b) plan, then there’s a good chance the 1099-R correctly shows the non-taxable amount. Just know that you may have to file Form 8606 with your return in this case. Form 8606 includes a formula that helps you determine the taxable portion of your distribution. Filing this additional form will help the IRS understand how you got to the current figure.

  4. Stay accurate with any recharacterization – Let’s say that you converted an amount that water recharacterized down the road. If a conversion for last year is recharacterized this year, the 1099-R for recharacterization will not be issued until January of next year. Not only that, but the tax reporting for the recharacterization will likely not correspond to the tax reporting for the conversion. Consider the hypothetical in which you converted $200,000 last year and, due to market losses, the account was valued at $150,000 when it was recharacterized. You should expect to receive a 1099-R form and a 5498 showing $150,000 for the recharacterization. Still, you would treat the entire $200,000 as non-taxable because the entire amount was recharacterized for tax purposes. In the event that you characterize less than 100 percent of the conversion, you will need to file IRS Form 8606.

Unless the form shows that you had taxes withheld, it’s not required that a 1099-R be filed with your return. It’s a good idea, however, to keep a copy of your account statement that includes the transaction for which the form was generated. This way, you have what you need should a transaction review come up down the road.

Stress-Free Way to File 1099 Forms

We are proud to make 1099 preparation much more efficient and cost-effective than it’s been in the past. OnlineFileTaxes.com is an IRS-approved e-file provider. Whether you need just one copy of 1099 forms or hundreds, we can help. Our 1099 online forms are available for as low as $1.25 perform.


Here’s how it works: First, use our online tax reporting service to e-file your 1099 forms in minutes. No longer are you forced to spend hours on end filling out forms manually. From there, your online files are electronically sent to the IRS for fast, efficient, and simple filing. We even print and mail recipient copies for you to keep for your records.

With OnlineFileTaxes.com, you don’t have to invest in expensive software that you only use during tax season. Plus, say goodbye to outrageous administrative and IT costs related to year-end 1099 processing.

Have you been searching for a less stressful way to e-file 1099 forms? Look no further than OnlineFileTaxes.com.