As the year winds down, it’s time to tackle an important yet often overwhelming task for many business owners: preparing for 1099s and tax season! In this highly-requested episode, Danielle Hayden, CPA and founder of Kickstart Accounting, Inc., teams up with Kelsey Chester, Kickstart’s Lead Account Manager, to deliver a step-by-step guide to staying organized and compliant with IRS rules when filing your taxes. 

Whether you’re a seasoned business owner or just starting out, this episode has something for you. From IRS compliance to best practices for collecting W9s and knowing when to transition contractors to employees, Danielle and Kelsey cover it all with practical advice and actionable insights to help you tax prep with confidence.

Key Takeaways: 

• Understanding W9s and 1099s: A W9 gathers contractor info, while a 1099 reports payments over $600—always collect a W9 before paying contractors.

• Best Practices for W9 Collection: Collect W9s electronically, store them securely, and require submission before issuing payments.

• Payment Methods and 1099 Requirements: Personal Venmo/Cash App payments may require a 1099, while business platforms like PayPal might issue them automatically—verify with the platform.

• Contractor vs. Employee: Contractors control their work methods and tools, while employees follow your guidance, schedule, and use your resources.

• Making the Shift to Employees: Transitioning to employees ensures compliance, builds retention, and avoids IRS penalties for misclassification.

• Plan Ahead for Payroll Setup: Start payroll planning early to streamline the January rush.

Topics Discussed: 

What is a 1099 and a W9? (00:01:08 - 00:02:57)

Best Practices for Collecting W9s (00:02:57 - 00:04:12)

Storing W9s and Organizing Financial Records (00:04:12 - 00:05:10)

Who Needs a W9 and When to Collect It? (00:05:10 - 00:06:34)

Payment Methods and IRS Guidelines (e.g., Cash App, Venmo) (00:06:34 - 00:08:23)

Difference Between Contractors and Employees (00:08:23 - 00:11:32)

When to Move Contractors to Employees (00:11:32 - 00:14:20)

Benefits of Hiring Employees (00:14:20 - 00:15:00)

Clarification on Employee Benefits for Part-Time Employees (00:15:00 - 00:15:19)

Summary and Getting Help (00:15:55 - 00:18:28)

 

Resources: 

Tax Forms | https://www.irs.gov/ 

Free Guides | https://kickstartaccountinginc.com/gift/ 

6 Tax Tips Every Business Owner Should Know 

 

Book a Call with Kickstart Accounting, Inc.:

https://www.kickstartaccountinginc.com/book 

 

Connect with Kickstart Accounting, Inc.:

Instagram | https://www.instagram.com/Kickstartaccounting

YouTube | https://www.youtube.com/@businessbythebooks 

Facebook | https://www.facebook.com/kickstartaccountinginc