There are few three letters more dreaded than I.R.S. When tax season rolls around, it’s often a scramble to complete and validate many 1099s.
That’s why it can benefit an organization to be proactive with its 1099 process. When there is a yearlong focus on the filing, you’re less likely to encounter errors and can have everything cleared up well before tax season.
Taking a proactive approach with 1099s can include:
- Validating 1099 MISC and NEC data with the IRS.
- Requesting invalid data quarterly.
- Maintaining a database, including records of change reports from 1099 data.
- Working with third-party e-payment vendors to keep an updated record of payments.
Why is it important to validate and maintain records of client 1099s well before tax season? When you submit inconsistent or incorrect data to the IRS, it may result in a penalty notice, known as a CP2100. From there, you’re on the hook for backup withholding. No one wants a protracted filing season with the IRS; filing right the first time can save both time and money for your team.
However, developing a 1099 solution can be time-consuming, and for those who are inexperienced, it can become a full-time job in and of itself. The time it takes to keep, maintain, and amend 1099 data can take away valuable resources from other projects. While organizations may have the best intention to keep up with the process internally, it requires experience and a well-organized system.
JMS and Associates can provide a comprehensive 1099 solution for your organization. Our team will validate your data with the IRS and send out W9’s to invalid entities to amend errors. Come January, JMS will print and mail your information and in March, file with the IRS, all with little input on your end.
If a client receives a CP2100 penalty notice, it’s pass on to JMS to be handled internally, without involvement from your team. After five years of experience, JMS Clients’ have never had to pay a penalty!
So, are you ready to take 1099s off your plate? Learn more about our professional solutions or contact a sales representative.
