The Bookkeeper's 1099 Season Workflow — How to Collect W-9s and Issue 1099-NECs Without the January Chaos

Every January, bookkeeping practices across the country run the same drill: discover which clients paid contractors over $600 during the year, discover which of those contractors do not have a W-9 on file, send emergency requests for W-9s to contractors who have not heard from this client in months, and try to file 1099-NECs by January 31 while simultaneously starting tax season. Some make it. Many do not.

The January chaos is not caused by January. It is caused by the system that was (or was not) built in the other eleven months. The firms that make 1099 season look easy are running a proactive year-round W-9 collection system — one that catches new contractors at the moment they are hired, confirms vendor thresholds quarterly, and enters December with a complete, verified list rather than an alarming gap.

This guide covers that system in full.

Why proactive W-9 collection matters

The leverage point is moment of hire. When a client hires a new contractor, both parties are motivated to complete the administrative onboarding: the contractor wants to be paid, the client wants to start working. A W-9 request at this moment has a near-100% completion rate. A W-9 request in January from a contractor who was paid nine months ago and has since moved on to other clients has a much lower completion rate — and a deadline of January 31 to comply.

31%

of 1099 filing deadlines missed or extended are attributable to outstanding W-9s from contractors — information that could have been collected at the time of hire

Source: IRS SPEC Partner Survey data, 2025

The year-round 1099 system

October: the proactive audit

The 1099 system — October setup

Pull the vendor payment report

In QuickBooks Online: Reports → Vendor Expenses. Filter by year-to-date. Sort by amount. Review all vendors paid over $400 year-to-date — these are candidates for crossing the $600 threshold by December.

Check W-9 status for every candidate

For each vendor over $400, verify that a current W-9 is on file with the correct name, address, and Taxpayer Identification Number. A W-9 from two years ago is not always reliable — contractors change addresses and legal names. Flag outdated W-9s for refresh.

Send W-9 requests for missing forms

For any vendor over $400 without a current W-9, send the request in October. Do not wait for the threshold to be crossed — by the time you know it has crossed, you are already behind.

Identify exempt vendors

Verify which vendors are corporations (S-corps, C-corps) and mark them as exempt from 1099 in your records. This prevents January confusion about who needs a form.

Monthly: new contractor catch

The October audit catches the existing vendor list. The monthly catch prevents new gaps from opening.

Monthly 1099 maintenance — add to regular bookkeeping workflow

• Review new vendor setup in QBO/Xero for the month — any new contractors added?
• For each new contractor: is a W-9 on file? If not, send a request immediately.
• Update contractor payment totals — flag any vendors approaching $600 threshold who have not yet provided a W-9.
• Note any vendors who have changed their address or legal name during the year — flag for updated W-9.

December: final audit and threshold confirmation

December 1099 audit — complete before year-end close

• Pull final YTD vendor payment report through December 31.
• Confirm which vendors crossed the $600 threshold — this is the definitive list for 1099 filing.
• Verify W-9 is on file for every vendor on the list — all information current.
• Confirm entity type for each vendor: is 1099 required or is the vendor exempt as a corporation?
• For vendors without a W-9 and over $600: send a final urgent request with the January 31 deadline.
• Backup withholding: if a vendor has refused to provide a W-9, IRS backup withholding rules apply — note for the return.

January: filing

January 1099-NEC filing workflow

Prepare 1099 data in QBO

QuickBooks Online has a built-in 1099 preparation workflow under Expenses → Contractors → Prepare 1099s. The tool maps vendor payments to the correct boxes. Review each contractor for accuracy before proceeding.

Verify recipient information

Confirm mailing address and TIN for each recipient. The IRS matches 1099 data to recipient returns — TIN mismatches trigger penalty notices.

E-file through QBO or a third-party service

QBO’s built-in 1099 e-file is included with some subscription levels. Third-party options include Track1099, Tax1099, and similar services. E-filing is faster, provides delivery confirmation, and generates a recipient copy automatically.

Deliver recipient copies by January 31

Recipients must receive their 1099-NEC by January 31. E-file services typically generate and deliver recipient copies via email. Confirm delivery for each recipient.

File Copy A with the IRS

The IRS deadline for 1099-NEC Copy A is also January 31 — earlier than other 1099 types, which makes early preparation essential. E-filing generates automatic IRS transmission.

The W-9 collection workflow

Requesting a W-9 from a new contractor is a simple task made complicated by the fact that contractors often do not know what a W-9 is or why they need to complete it. A clear, frictionless request reduces the back-and-forth. You can instantly generate customizable email templates using our free Document Request Template Generator specifically built for contractor onboarding.

W-9 request email

Unclear — creates questions

Hi, we need your W-9 for our records. Please complete and return it at your earliest convenience.

Clear — enables immediate action

Hi [Name], I'm [your name], bookkeeper for [Client Name]. Before we can issue your payment, we need a completed W-9 form — this is standard for any business paying contractors. It takes about two minutes to complete. Here is the IRS form: [link]. Please return it by [date]. If you have questions, I'm happy to explain what it is and why we need it.

Common W-9 questions from contractors and how to answer them:

Contractor W-9 questions — how to respond

Why does my client need my Social Security Number?

IRS regulations require businesses that pay contractors $600 or more per year to report those payments on a 1099-NEC. The W-9 collects the taxpayer identification information needed to do that correctly. The SSN (or EIN, for contractors who have one) is required for the IRS filing — it does not give the client access to your financial accounts or credit history.

Can I give my EIN instead of my SSN?

Yes. If the contractor has a business entity with an EIN (sole proprietorship with an EIN, LLC, etc.), they can provide the EIN instead of their SSN. The W-9 has a checkbox for the entity type and a field for either TIN. Note: if they provide an EIN, confirm that the name on the W-9 matches the name registered with the IRS for that EIN.

What if the contractor says they do not need to complete a W-9 because they are a corporation?

Corporations (C-corps and S-corps) are generally exempt from 1099-NEC reporting. However, you should still have them complete a W-9 to document their exempt status — specifically, checking the “C Corporation” or “S Corporation” box in Part I. This protects your client if the IRS questions the absence of a 1099 for a particular vendor.

What to do with contractors who do not respond

If a vendor refuses to provide a W-9 — or if you cannot locate them by January — IRS backup withholding rules apply. The client (payer) is required to withhold 24% of the payment and remit it to the IRS. This is rarely triggered in practice for legitimate business contractors, but it is the rule.

For contractors who are simply slow to respond, the practical approach:

Escalation approach for missing W-9s

October

initial request

First W-9 request sent with clear explanation and simple instructions. Allow two weeks for response.

November

follow-up

Follow up for any outstanding W-9s. Reference the January 31 deadline. Offer to answer questions.

January 15

final notice

Final notice: W-9 required by January 20 to process payment documentation. If not received, backup withholding rules apply.

W-9 collection works best as a structured request, not an email attachment

Quire’s document request checklists can include W-9 collection as a required item in your client onboarding flow — so new clients are prompted to collect W-9s from their contractors before they start paying them, not in January.

See Quire document requests