Clean Data is Key for Smooth 1099 Reporting

January 22, 2025

In this question-and-answer article, IOFM asks Christine Battles, APS, APM, APPM, Sr. Accounts Payable Manager at UniFirst, how she ensures smooth processing for 1099 reporting.

Christine is an IOFM Certification Trainer, Advisory Panelist, and frequent speaker for IOFM conferences and webinars. In this article, she talks about common challenges with 1099 reporting and her passion for reengineering and streamlining her processes each year to maximize efficiency.

Q. You are a strong advocate of working ahead—well before tax season—to make certain each reporting year is smoother than the previous year. What are some of the biggest challenges for you in the reporting process?

A. Typically, the biggest challenge for Unifirst (and any AP department) is making sure the 1099 data is cleansed and ready to report. In addition, AP needs to make sure that any payments that were made outside of the system are manually accounted for and properly submitted.

Q. Will you approach your reporting any differently this year? How have you streamlined and maximized your existing procedures?

A. This year, we focused heavily on putting processes in place so that we are continually looking at and ensuring any changes that affect reporting are cleansed throughout the year (quarterly) to make sure we have a smooth process when it’s time to execute the 1099 process.

Q. Do you anticipate that state reporting will be easier this year? For example, have state requirements become more uniform, state to state?

A.The state requirements are still disparate, and they require additional diligence and effort. We still need to research each state's requirements and obtain individual unique forms for some states.

Q. Have your ERP and AP automation systems provided relevant patches to ease state reporting?

A. Not yet. We’re in the middle of an ERP deployment. No investments or changes are currently being made in the current system, and we are currently configuring the new system for a first round of testing. State reporting in the new system is still to be determined.

Q. How will IRS's "continuous use" Forms 1099-MISC, 1099-NEC (and other Forms 1099) simplify processes this year and in years going forward? Last year we used—and this year we will again use—a third-party provider to print and report our 1099s while we implement our new ERP.

Q. Is your organization fully prepared to electronically file your 1099, 1042-S and other forms?

A. Yes, we are prepared to file electronically. However, our third-party provider will file on our behalf again this year.

Q. Have you reviewed all the tax regulatory changes and IRS form changes?

A. Yes. Our Certified Payment Reporting Specialist utilizes IOFM’s resources to understand forthcoming changes and follows up with the IRS or other resources as may be required.

Q. What information would you say is most helpful to you during the tax season? And what best practices do you advise other practitioners to employ to make for a smooth tax season?

A. IOFM is by far the most helpful resource we have. We’ve come to rely on the resources and the information IOFM and our tax partners provide, along with the educational opportunities provided.

I take the opportunity whenever possible to promote IOFM for resources and tools for anything regarding accounts payable. As far as best practices are concerned, outsourcing is one way to meet tax filing requirements, particularly if you don’t have a knowledgeable individual in-house who can support this process.

If you do support 1099 tax filing requirements in house, a best practice would be to keep your vendor master file and your transactional data clean throughout the year. I can’t stress that enough. Don’t wait until year-end to think about this process!

Resources:

To simplify your tax season, access and explore the following IOFM resources: