"Avoiding 1099 Pitfalls: A Guide to Year-End W-9 Collection"

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Hi, it's Tanya Schulte with The Profit Constructors, and we've been talking
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1099s, best practices, how to collect W-9s up front, and how to make sure that
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we're avoiding any pitfalls.
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So what if it's the end of the year and you haven't collected some W-9s? What should you do?
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It's crunch time, right? We've got to get these things in. So first,
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reach out to those vendors immediately.
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Let them know that you should have collected that W-9 up front,
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but you need it right away. Explain the urgency of the situation.
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Here's what you can do. Let them know if they don't provide it and they want
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to continue working with you, you're going to have to withhold backup withholding
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of 24% out of everything you pay to them.
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Again, it's an administrative nightmare for you. It'll be an administrative
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nightmare for them and they're probably not going to want that.
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So just go ahead and let them know you need that W-9 as soon as possible.
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The other thing you want to do is document every attempt you make to collect
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that W-9 because that's going to be crucial in case of an audit.
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Make sure you can let an auditor or no, we did everything in our power to try to make it right.
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And then moving forward, again, to appease the auditors, you want to go ahead
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and get a policy in place.
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Better be a written policy and make sure that W-9s are going to be required
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before payments going forward.
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All of these steps will help protect you under audit and just make it better
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so that we don't have this hassle and headache again next year.
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So there's some great tips.
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Remember, the policy should always be no No W9, no check. That's how we're gonna
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roll around here from now on.
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Music.