1099 Preparation Checklist

By Nupur Mittal

Co-Founder, OCTA

This is a free 1099 preparation checklist for accounting and bookkeeping firms — the full set of steps to gather W-9s, identify who needs a 1099, reconcile payment totals, and file 1099-NEC and 1099-MISC forms accurately and on time. Use it every January to make 1099 season predictable instead of a scramble.

The 1099 preparation checklist

Phase 1 — Gather vendor information

• Pull the list of all vendors paid during the tax year.
• Confirm a valid W-9 is on file for each potential filer.
• Request missing W-9s in writing; document the request.
• Verify each vendor's legal name, TIN, and address against the W-9.
• Flag vendors marked as a corporation (generally exempt, with exceptions).

Phase 2 — Identify who needs a 1099

• Identify vendors paid $600 or more for services during the year.
• Separate 1099-NEC (nonemployee compensation) from 1099-MISC (rent, other income).
• Exclude payments made by credit card or third-party network (reported on 1099-K by the processor).
• Exclude corporations, except attorneys and medical/health payments.
• Confirm the reportable amount excludes reimbursed expenses where separated.

Phase 3 — Reconcile the amounts

• Total payments per vendor from the general ledger.
• Reconcile 1099 totals to the AP and expense accounts.
• Remove credit card / processor payments from the totals.
• Confirm the box (NEC Box 1, MISC Box 1/2/3) is correct per payment type.
• Have a reviewer check totals against the ledger.

Phase 4 — File and deliver

• Prepare 1099 forms with verified names and TINs.
• Send recipient copies by January 31.
• File 1099-NEC with the IRS by January 31.
• File 1099-MISC with the IRS by the applicable deadline.
• File any required state 1099s.
• Retain copies and the filing confirmation in the client file.

How to use this checklist

Start in the year-end close, not in January — the single biggest 1099 headache is chasing missing W-9s at the deadline. The critical judgment step is Phase 2: separate service payments that need a 1099 from credit card and third-party-network payments, which the processor reports on a 1099-K and you must exclude to avoid double-reporting. Reconcile the 1099 totals back to the ledger so the amounts you file match the books. Both recipient copies and the IRS filing for 1099-NEC are due January 31 — build backward from that date.

Common mistakes and tips

• Double-reporting card payments. Payments made by credit card or through a processor are excluded from your 1099s — the processor reports them on a 1099-K.
• Missing W-9s. Collect them when you onboard a vendor and again during year-end, not on January 30.
• Wrong form or box. Nonemployee compensation goes on 1099-NEC Box 1; rent goes on 1099-MISC. Confirm the box per payment type.
• Assuming all corporations are exempt. Payments to attorneys and for medical/health services are reportable even to corporations.

Run this checklist automatically in OCTA Flow

1099 prep is high-volume matching and reconciliation — ideal for automation. In OCTA Flow, the 1099 Skill pulls vendor payments from QuickBooks, Xero, Sage, or Zoho, flags vendors missing a W-9, separates reportable service payments from excluded card/processor payments, and reconciles the totals to the ledger — surfacing anything that doesn't tie as a finding by severity. Flow logs every step for the audit trail; your team reviews and approves before filing. See 1099 preparation automation, start it during the year-end close, and cross-check vendors with the AP aging report template.

Frequently Asked Questions

Who needs to receive a 1099-NEC? Generally, any non-corporate vendor paid $600 or more for services during the year, excluding payments made by credit card or third-party network. Attorneys and medical payments are reportable even to corporations.

Why exclude credit card payments from 1099s? Because the card processor or third-party network reports those payments on a 1099-K. Including them on your 1099 double-reports the income to the IRS.

Make 1099 season predictable — automate the matching and reconciliation → start a 30-day OCTA Flow trial.