Mastering 1099 Corrections for Attorney Clients

This week we're going to talk about mastering 1099 corrections for your attorney clients. So this happened to us a few times this year, not so much the ones we did, but we get a new client and there's a correction that needs to be done. And how do you handle the corrections? As a bookkeeper working with attorney clients, you, you need to know this because 1099 forms can feel like navigating a minefield. Errors are rare, but knowing how to address them is really important. And then understand how the errors are presented on a 1099 form. You might start working with a client and find that the client's vendor reaches out to you and says, this is wrong, this is not the right amount. And that's something that you might find, that if it's a wrong amount on the form, it's kind of a Type 1 error, and it's just correcting the monetary amount. Maybe something was not reported properly. Maybe they had something in the wrong category. So You need to correct it. A Type 2 error is if your client had a lot of people that you sent 1099s out to that didn't have an identification number on them. And those are the things that you will find. It's a good practice to kind of sit your client down now before next year and say, look, don't pay anyone until you get the numbers. And we like to use either Gusto or QuickBooks for that. So ask to retrieve those 1099 details before you pay them. Say you have to fill this out before I can pay you. So you're getting that W-9 electronically and you're keeping track of it. And if you pay them like in Gusto, you're going to have that way to file a 1099 very simply in QuickBooks, the same thing. And this year, in fact, they did allow for us to make these corrections inside of QuickBooks, which is one of the reasons that a lot of people didn't like QuickBooks or didn't use it was because of that. So know that you can correct these errors, although you don't need to resend forms if it's the Type 2 1099 error. Know that keeping your client informed of the pay information is essential. When you get that W-9 information, you do need to get that into the QuickBooks file. Sometimes the corrections are late, and you're sitting here listening to this article, this video, you're probably gonna find that this is probably late. And they fall into the cracks until the IRS notifies that the filing deadline's been missed or it had to rectify an error on the side of the client. So you're going to get the client filing a tax return and they report something different than what the 1099 says. So it's important to avoid these errors at all costs. At first, that's your first step, trying not to have these errors. But you know, a pound of prevention is better than the cure. So knowing that you've got all your ducks in a row now and doing this on a regular basis. This is what we love Keeper for. The app Keeper software is amazing for tracking 1099 details. I think that that is the number one thing to do is to have that workflow process in place. We always talk about workflow. Get your client in the habit of workflow process. You may have Keeper, but have a list every single month for the client. These are the 1099 people that we see, and you paid this or that, and you did not get the 1099 information. Get the client used to getting that 1099-W-9 information in before they pay the vendor. They're very much more interested in giving it to you if you get it before they're paid. If it's after the fact, stay on it now. So when it's not such a busy time of the year, you'll have probably more success in getting those W-9s completed. So it's really an important part of our role. I'm seeing more and more that the tax professionals are not doing the 1099s. They're pushing that job onto the bookkeepers. So having a workflow process in place with your client is key to be able to have a successful and happy and accurate 1099 season. I hope that helps. We'll see you all next week. Bye now. Bye.