WHO: EdFin prepares 1099s for our clients and we need your help!
WHAT: Some of us refer to the type of employment as W-2 or 1099, but what does that really mean?
A “W-2 employee” is someone on the school's payroll, a teacher, an Educational Assistant or an office staff
A “1099 service provider” is a contractor. Your auditor, your legal counsel, or contracted special education provider
WHY: Since the contractor is paid outside of the payroll system, taxes aren’t being taken out of their wages. IRS Form 1099 is a record of the total amount paid to a contractor during the calendar year. Each 1099 is then sent to both the contractor and the IRS. Some service providers will be required to pay taxes on these amounts- they should consult their financial advisors.
WHEN: As we approach the end of the calendar year, we will start the process of preparing 1099s for the contractors who provided service to your school during the 2023 calendar year. It’s a quick turnaround time from the end of December to mail/email out the 1099s by the end of January. So, this is where we need your help!
NEXT STEPS: We recognize that most of the time when you start using a new contractor you send over their W-9 right away, or one of our staff will request it from you. Sometimes we still need your help at the end of the year to get the W-9, if we didn’t receive a copy when the initial payment was made. In the coming weeks, you may see emails from us asking for outstanding W-9s that we still need from you and your contractors before we can complete the 1099s. If you receive this request from us, please reach out to your contractors and service providers right away!
Not all service providers get a 1099, but it is best practice to have a W-9 for all contractors and service providers so we can confirm this for ourselves. We will use IRS guidelines and make the determinations as we work on each school.
REMEMBER:
1099s give the total amount paid to a service provider during a calendar year.
EdFinMN begins working on missing W-9s late in the calendar year.
We may request missing W-9s from you.
January 2, EdFin starts processing 1099s.
January 31, all 1099s should be sent to service providers.
EMPLOYEE W-2: As an aside, employee W-2 forms will also begin to be processed. These forms will be available by January 31, 2024.
As always, please reach out with any questions.
-EdFin Team
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