What has to happen before January so contractor 1099s are easy?
January feels hard only when the year’s information was never gathered. The work that makes 1099s simple happens months earlier, and it comes down to three habits.
The first one is collecting a W-9 the moment someone starts, before the first payment goes out. You want the legal name, the business name if there is one, the mailing address, the taxpayer ID number, and the entity type. The easiest time to ask is when a new contract supervisor or associate is excited to begin working with you. Tracking down a taxpayer ID in late January from someone who finished up in June is a different experience entirely.
The second habit is paying contractors from the business account and recording every payment to the payee rather than dropping it into a general expense category. If your QuickBooks Online vendors are marked as 1099 eligible and your accounts are mapped, the year-end report practically builds itself. The payments that go missing are almost always the ones made from a personal card or a personal payment app. It is also worth confirming how each payment channel gets reported, since amounts paid by credit card or through certain settlement platforms are often reported by the processor instead of by you.
In my work doing bookkeeping for mental health professionals, the contractor list tends to be longer than practice owners expect. Associate clinicians paid as 1099s, contract clinical supervisors, a part time office manager working as a contractor, IT help, the cleaning service, an attorney, a consultant who helped with your website, and sometimes rent depending on how the lease is written. Naming the payee on every payment matters because different kinds of payments land in different reporting boxes. Whether a particular person should be a contractor or an employee is a question for your attorney or tax preparer, and the books simply record whichever answer is true.
The third habit is a December review. Pull totals by vendor, compare them against the reporting threshold in effect for that year, and flag anyone missing a W-9 or a current address. Thresholds and forms do change, so confirm the current ones with your tax preparer. December is also the last comfortable moment to reach someone who has moved on.
Once those three things are in place, January is administrative. I handle 1099 preparation and filing starting at $100, which includes five forms, with $10 for each additional form. Filing deadlines usually fall at the end of January, so it helps to be ready a couple of weeks ahead.
If you are not sure your contractor records are in shape for this year, let’s take a look together. Book a consultation with me and we can go through what you have and what is still missing.
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Tell me where your books stand right now, even if the honest answer is that nobody has looked at them in a year. I'll ask a few questions and give you a clear idea of how I can help.
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What do you deliberately not do?
Four things stay outside my scope. Tax return preparation, insurance billing and credentialing, payroll system setup, and clinical or legal advice. Naming those lines up front means everything inside them gets my full attention.
Read answerI'm embarrassed to show anyone my books. What will you think of me?
I think it took something to ask. Close to half the people who contact me open with an apology, so you are in good company. The state of your books tells me what work needs doing, and nothing at all about who you are.
Read answerWhat financial records should a private practice actually keep?
Business bank and card statements, revenue reports from your practice management system, receipts for deductible expenses, payroll and contractor records, and the bookkeeping file that ties them together. Keep them organized by year and month so any question has a findable answer.
Read answerWhat does monthly bookkeeping actually do for a private practice?
Monthly bookkeeping keeps your books current, keeps your financials tax-ready, and gives you a clear view of how the practice is doing. Each month transactions get categorized, accounts get reconciled to the bank, and you get a short set of reports you can read between sessions.
Read answerHow should insurance payments show up in my books if you don't do billing?
I don't do insurance billing, claims, ERA posting, or credentialing. That work stays in your practice management system or with your biller. What bookkeeping does is reconcile what that process produces, matching every payer deposit that reaches your bank against what your records say you were paid.
Read answerWhat's different about bookkeeping for a psychologist who does testing?
Testing behaves like a second business inside the same practice. The engagements run long, the money often arrives on a different schedule than the work, and materials cost real money, so testing revenue and testing costs belong in their own categories.
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