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As we kick off 2025, we’re diving into one of the most crucial topics for financial professionals: setting yourself up for success this tax season. This episode features our compliance expert, Jason Dinesen, who shares actionable strategies to simplify your 1099 reporting and e-filing processes. Whether you’re navigating the latest IRS requirements or looking to avoid costly penalties, Jason’s insights will help you streamline operations and ensure compliance. Discover practical advice to start early, stay organized, and make 2025 your smoothest tax season yet.
Jason Dinesen
Jason is a tax nerd, entrepreneur, tax expert and a well-known presenter of continuing education courses. Known for his sharp tax interpretations, he is one of the quickest to bring the analysis of the latest tax updates and IRS guidance to the professional community. Jason has coached over 200,000 accounting, tax, and HR professionals on various topics of accounting, individual taxation, corporate taxation, professional ethics and much more.
He has presented over dozens of webinars on Form 1099 (for 10 years on this subject!); marriage in the tax code; tax updates; the new Form W-4, payroll updates, filing status, tax credit and other issues relating to the modern-day household setting. He also teaches on Individual Income Tax and Business Analytics. Jason always had a knack for radio shows and has and regularly features as an anchor for Radio Iowa. Jason was born and raised in Iowa and has a degree in corporate communications from Simpson College in Indianola, Iowa.
Grace Chlosta
Content Manager, IOFM
Grace Chlosta joined the Institute of Finance & Management (IOFM) in 2022 in a new role for the team as the Content Manager. She is responsible for the planning, organization, development, and implementation of all the content for IOFM’s digital products and (virtual and in-person) events. Grace is committed to ensuring that IOFM’s content stays timely, relevant, and actionable for all financial operations professionals, and works closely with a team of content developers, industry leaders, and subject matter experts to guarantee this happens.
Grace Chlosta: Welcome to the IOFM podcast. This is a podcast for accounts payable and accounts receivable professionals who want to stay in the know with current AP and AR trends and ideas. We'll be interviewing professionals in this space on a wide variety of subjects, including automation, artificial intelligence, career growth, compliance, leadership, and much more.
Today, we'll be interviewing Jason Dinesen. Jason is a tax nerd, entrepreneur, tax expert, and a well-known presenter of continuing education courses. Known for his sharp tax interpretations, he is one of the quickest to bring the analysis of the latest tax updates and IRS guidance to the professional community. Jason has coached over 200,000 accounting, tax, and HR professionals on various topics of accounting, individual taxation, corporation taxation, professional ethics, and much more.
00:00:59
He has presented over dozens of webinars on Form 1099 for ten years on this subject, marriage and the tax code, tax updates, the new Form W-4, payroll updates, filing status, tax credit, and other issues relating to the modern-day household setting. He also teaches individual income tax and business analytics. Jason always had a knack for radio shows and has regularly features as an anchor for Radio Iowa. Jason was born and raised in Iowa, and has a degree in corporate communications from Simpson College in Indianola, Iowa. Today, he'll be interviewed by me, Grace Chlosta, Content Manager at IOFM. I joined the Institute of Finance and Management in 2022 in a new role for our team as the content manager. I'm responsible for the planning, organization, development, and implementation of all of the content for IOFM's digital products and virtual and in-person events. I am committed to ensuring that IOFM's content stays timely, relevant, and actionable for all financial operations professionals, and I work with a team of content developers, industry leaders, and subject matter experts to guarantee this happens.
00:02:09
Hey there, Jason. Welcome back to the IOFM podcast. How are you today?
Jason Dinesen: I'm good, Grace. How are you?
Grace Chlosta: I'm doing good. We're so happy to have you back on. Happy 2025. I know we haven't had a podcast up with you since the new year, so hope the year is off to a – I know it's a busy start, but hope you're getting through.
Jason Dinesen: Yeah, yeah, it's a busy start, but I guess if we weren't all busy, that would be a problem, too, so it's good.
Grace Chlosta: Absolutely. Busy isn't always a bad thing, but hopefully we're going to be talking about some things that'll help people through this busy time. We're going to be talking today about setting yourself up for success for this tax season, and some new e-filing tips that are coming out. So we're going to cover why accurate 1099 reporting matters, how to avoid penalties, some lessons learned from the filing season so far, and, of course, the benefits of e-filing and really what you need to know this year to stay compliant with the latest IRS requirements. So you're the real subject matter expert, Jason, on all things compliance, so I'm going to mostly let you chat and let us know what we need to know, so that we can all really just stay on top of everything this season. If you need me, let me know, but I'll just let you fire away.
00:03:20
Jason Dinesen: All right, well, we're going to be talking about how to stay in compliance basically. As you're listening to this, it's after the January 31st due date for your 1099-NEC. And by the way, some of the things that we might be talking about would apply probably to W-2s, as well. I think the biggest thing, whether it's 1099s or W-2s, would be review your processes. So now we've gotten past January 31st, and you might still have some other 1099s with later due dates, but the big crush is your contractor 1099-NECs. Or past that, think about your processes, the entire thing. And you know what? I would say document not just the filing process that you just went through, but document everything, starting with things like gathering W-9s from your contractors. The W-9 should be gathered from any vendor where you are making a potentially 1099-able payment to that person or that entity.
00:04:46
And so start there, start with how do you gather W-9s, and then when the W-9s come back, what do you do with them? How are you entering things into what your system is? What you do will vary a bit from business to business, depending on what type of system you have. It could be you only work with a few contractors. Your needs are very simple, and you just get those W-9s and you tuck 'em away, and you use a spreadsheet or something. A lot of people listening to this, though, probably have software of some sort. How are you entering those vendors and the W-9 info into your software? And then how are you pulling reports at the end of the year so that you can issue 1099s? And how are you keeping track of things like, oh, we don't need to send a 1099 for this particular payment? Whether it's because the vendor is a corporation and you paid contract labor, which generally doesn't need to be reported then on a 1099 if it's to a corporation, or maybe you purchase supplies sometimes and those supplies are not 1099-able, but you also pay contract labor sometimes, or other situations.
00:06:08
You use the company credit card to make a payment – you don't have to report that on a 1099 if it's a payment for contract labor made with a credit card. So how are you differentiating those different types of payments in your system so that the reports that you pull at the end of the year are accurate? Those are all things to be reviewing now. And if there were any hitches, glitches, hold-ups or whatever, figure out how to fix those now.
00:06:44
That kind of feeds, I think, into a discussion of penalties. Penalties can apply for things like late filing, so like 1099-NEC the deadline is January 31st and, oops, we missed a 1099 that we should've filed. Sometimes people will ask, "What do we do?" Well, that answer is: send it whenever you discover this issue, just send it.
I have found, in the real world, sometimes the IRS doesn't actually penalize people who file, if it's just one random 1099 that you're filing late, they may not even penalize you sometimes. Now, don't take that as, oh, we can file late and nothing will happen to us. That's not what I mean. But sometimes they don't send penalty notices out. But at any rate, file it. Just file it and you may get hit with a late-filing penalty, but file it.
00:07:48
But they also can penalize you if the information on the 1099 is wrong, and one of the ways to get out of penalties for things other than just simply the random, late filing, is to show what your processes are.
Well, let's back up. One of the ways to get out penalties – in fact, the primary way that you could get out of penalties is probably by trying to argue reasonable cause. And the IRS is going to want to see your procedures as part of reasonable cause to show that you're doing your due diligence and maybe this was just like a random mistake that you made, as opposed to something – there are businesses out there that have no processes and procedures for their 1099 filing at all. And I always say, if you don't have procedures, get procedures.
00:08:56
Just like the W-9 is your best friend – that's how I describe the W-9; it's your best friend – so are procedures. Procedures are a friend, so be reviewing your processes, and if there's something that didn't quite work right with your 2024 forms, what can you do to change that glitch in the system and get it fixed? And now it's still early in 2025 – time goes really, really fast. We're going to be at 1099 season again before you know it. But you do still have time to implement changes for 2025.
00:09:41
So a few other things – e-filing is with us now. This is the second 1099 season of e-filing, so this started with 2023 forms that you filed a year ago and it continues. The IRS does not care how you e-file. There's different things that you can do for electronic filing, different ways. There's the IRS IRIS system (I-R-I-S). Information Return Intake System is what that stands for. That's a newer system where you can log in and either key in by hand or upload your 1099s. The IRS has an older system called FIRE (F-I-R-E). Some of you may have log-ins to that, and if you do you can keep using that. FIRE is going to be phased out at some point in the future, but we don't know when.
00:10:51
There's different online platforms that you can use. Those online platforms actually are ultimately connected to either IRIS or FIRE, but you're filing through the online platform. And your bookkeeping software – some bookkeeping software will e-file your 1099s and your W-2s. So you have different ways that you can do it. Most people listening to this are probably subject to the e-file mandate. So hopefully you've had a system in place so that you at least were e-filing when you were supposed to, but the real thing is now review. Did you like the way that that system worked? How labor-intensive was it for you? And now would be a good time to investigate other systems.
00:11:55
And you know what? Both the spring and the fall IOFM conventions, there's a couple of those platforms that are there, in the – Grace, is it called the convention hall? Now I'm blanking – the exhibit hall?
Grace Chlosta: Exhibit hall, that's right, yeah.
Jason Dinesen: The exhibit hall. A couple of those providers are there that you could talk to at the spring and fall conventions for that. If you're interested in the IRS e-file system, the IRIS system, that would be a publication from the IRS called 5717, publication 5717. You can find it on the IRS website. It'll tell you how to get set up on IRIS.
00:12:43
I think the only other thing that I would say today [is]: What are some things for compliance and to get out in front of is remember to periodically – well, do two things with states. Figure out which states you might need to file 1099s with, where your contractor is actually doing the work. If they're doing the work in a different state from the different state you're located in, you might need to file a 1099 in that state. And then, of course, what are the rules in your state? Some states care very much about receiving 1099s. Some states don't care at all. Some states piggyback with the IRS, so when you e-file with the IRS, as long as you mark things properly in the e-file setup, the 1099 will get forwarded to the state.
00:13:49
Other states do not partner with the IRS and you have to go in and file 1099s through some other system that the state uses. These rules at the state level are always changing, and so figure out what states you might need to file in, and then you don't have to do it every day or even every week, but a few times throughout the year, go to that state Department of Revenue website and see what they say about 1099s. Has anything changed as the year has gone on? That way, you can get out in front of it right away and not be scrambling in January to realize that the rules in this particular state have changed, or the system that they use has changed, or whatever. It's a lot better to know those things during the year than to get stuck trying to figure it out at the end of January.
00:14:53
So those are just a few things. I think the other, final thing – I said the states would be the final, but one more, final thing would be: Get W-9s, if you're not doing that already. I think the IOFM audience is typically pretty good about getting W-9s from everybody. But if you're not getting W-9s, get them. Like I said before, they are your best friend with anything relating to 1099 compliance. So if you haven't been getting W-9s, that actually should be the very first change that you make to your procedures in 2025 is get W-9s.
00:15:39
So with that, Grace, I think those are just some quick compliance updates for folks here in 2025, as far as what they can get out in front of and start changing now to have a successful 2025, as far as gathering information, and then a successful filing season next year for their 1099s.
Grace Chlosta: That is awesome, Jason, such great information. Short and sweet. We absolutely loved it. We always love having you on the podcast. I'm feeling inspired, and I hope that everyone else is feeling a little bit less more – less stressed, I guess, not more, less stressed about this tax season based on those tips. We really appreciate having you on, as always.
Jason Dinesen: My pleasure.
Grace Chlosta: We will talk soon. Thanks, Jason.
[music playing]
Grace Chlosta: Thank you so much for listening to the IOFM podcast. Remember to head on over to the Member Forum to discuss today's episode and provide ideas for our next one. And to stay up to date on IOFM's current events, both in-person and virtually, head on over to IOFM.com.
Continuing Education Credits available:
Receive 1 CEU per hour of listening time towards IOFM programs:
Receive 1 CEU per hour of listening time towards maintaining any AP and P2P related program through IOFM! These programs are designed to establish standards for the profession and recognize accounts payable and procure-to-pay professionals who, by possessing related work experience and passing a comprehensive exam, have met stringent requirements for mastering the financial operations body of knowledge.
Continuing Education Credits available:
Receive 1 CEU per hour of listening time towards IOFM programs:
Receive 1 CEU per hour of listening time towards maintaining any AP and P2P related program through IOFM! These programs are designed to establish standards for the profession and recognize accounts payable and procure-to-pay professionals who, by possessing related work experience and passing a comprehensive exam, have met stringent requirements for mastering the financial operations body of knowledge.
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