Accounting teams brace every year for a January filled with fire drill after fire drill of frantic spreadsheets and late night data entry sessions.
It’s 1099 season, and it’s one of the most stressful times of the year for accounting teams…right after the close of business madness in December.
What if you could file all of your 1099s accurately and on time without that stress this year?
I chatted with Kerri Florian, Sr. Accounting Manager, and Wade Warren, Head of Product at Wingspan, to talk through a step-by-step process to simplify the entire 1099 filing journey. It’s time to transform your filing process from a chaotic, error-prone experience into a predictable, efficient process that gives you peace of mind.
You can watch the entire session here, or read on to get the recap.
1099 season is a major headache for accounting teams
Independent contractors now make up a significant portion of the U.S. workforce—over 41 million Americans participated in the gig economy in 2022, and that number has only grown over time. This reflects the business need for specialized skills that can scale combined with workers’ demands for remote work and flexible arrangements. Because of this growing trend, IRS and state agencies are increasing their oversight of contractor earnings reported through 1099-NEC forms.
But the 1099 process for many accounting teams makes filing difficult. Failing to deliver by the January 31 has very real consequences for both accounting teams and their contractors. Says Kerri Florian, Sr. Accounting Manager at Wingspan, “I’ve seen situations where relationships with contractors have soured after delays in receiving their forms due to inaccurate information or earnings. These errors can lead to compliance audits by the IRS penalties, extra administrative time, and damage to a company’s reputation.”
Mistakes happen to even the best accounting pros. But implementing the right system can transform tax season from a headache to a routine process that is accurate and efficient.
Common 1099 challenges—and how to solve them
Think of the 1099 process as a pipeline. One one end, you have the contractor data that needs to be collected, validated and stored. On the other, you have a final submission to the IRS with relevant states and also with the contractors.
“The main challenges I've seen includes chasing down 1099 verifying tax identification numbers and making sure contractor details are correct, the year end data consolidation of multiple sources from your AP to your accounting system and manual checks and wires, and then the actual submission to the IRS and individual states, each with their own unique requirements and deadlines,” says Kerri. “Each of these challenges, if left unaddressed, can lead to last minute scrambles, unnecessary penalties and strange relationships with contractors who help your business thrive. Understanding these hurdles is the first step to overcoming them.”
We’ll dive deeper into each of these:
- Information collection and verification needs to happen in the onboarding phase
One of the biggest early hurdles for your 1099 process? Ensuring your contractor data is accurate and complete long before the filing deadline.
“When businesses wait until mid-January to track down missing W9 information like incomplete addresses and verifying tax IDs, it creates a frantic atmosphere that basically guarantees errors,” says Product Manager Wade Warren. “The simplest way to prevent this chaos is to implement a structured digital onboarding system where each contractor provides their information as soon as they begin working with you.”
The goal is to verify TINs at the outset—you can use the IRS’ matching tool or an integrated platform like Wingspan—to help streamline this step by confirming your contractor’s name and TIN alignment right away to eliminate those last-minute scrambles.
The healthier your data collection habits, the easier your 1099 process will be. “Instead of thinking of data collection as a chore reserved for January, think of it as a year-round maintenance practice similar to checking the oil in your car,” adds Kerri. “Every quarter or before each significant project, review the contractor data you have on file and confirm that data is still correct with the contractor.”
Not only does this make your life easier, but it establishes trust early on with your contractors, giving you a stable foundation that supports the seamless transition form initial data gathering through final filing.
- How to streamline year-end data consolidation
The next big challenge for accounting teams is pulling together all of the year-end information to complete the 1099 form. While that sounds simple, it’s often complicated by fragmented data, tight deadlines, and strict formatting requirements. Your payments may come from all systems, accounting software, payroll platforms, and spreadsheets, each with unique naming conventions
“Many businesses wait until late December or January, rushing toward the IRS deadline, to do this,” says Wade. “You might spend hours reconciling and verifying amounts, and then you have to format everything differently based on the IRS and state agencies, which have rigid electronic filing standards that require manual data entry, which has its own error risk.”
To streamline year-end data consolidation, you need a centralized data repository for all of your independent contractor information, which can eliminate messy last-minute reconciliations. Kerri also recommends regular data audits to ensure accurate contractor payments. “Define the submission workflow ahead of time with your team,” she says. “Identify who reviews what, go over the IRS filing standards and formatting rules, and document those steps ahead of time so everyone knows what to expect.”
By centralizing data, auditing regularly, and clarifying workflows, you reduce stress, meet deadlines and maintain accuracy.
- Submission is not the finish line for your 1099 delivery
Although the submission may feel like the finish line, it can reveal new challenges. Delivering physical copies of the 1099 can be costly and time-consuming if you rely on paper mail, or creates security risks by emailing PDFs with sensitive data. “Once you get those 1099s filed, it can be a huge pain,” says Wade. “You’ve got contractors calling or emailing, saying, ‘What is this amount? Why don’t I see this reflected here?’ It makes the entire process overwhelming, and there’s a huge time crunch.”
On average, up to 10% of 1099s may need to be amended due to errors—so if you cut it close to that January 31st deadline, you’re adding a lot of stress for both you and the contractor. Over 70% of freelancers surveyed by Upwork last year say transparent payment and tax practices influence their willingness to continue working with the client, so without a system, contractors get confused about how to access their documents and resolve errors.
“Communicate clearly and often, send reminders about deadlines, and provide FAQs or simple guides to interpret the 1099 form in advance,” advises Kerri. “This reduces confusion and shows respect for their time.”
If errors do happen, address them as quickly as possible to minimize penalties and maintain trust with your contractors. A post-filing audit can catch issues before contractors notice them, as well. With compliance roadmap, electronic filing and delivery and thorough documentation, you turn a stressful scramble into a predictable, efficient process.
Wingspan makes your 1099 process easy
To make your 1099 process easier, you need the right tools. With Wingspan, you can:
- Collect data from your contractors immediately during the onboarding phase, ensuring accuracy when it comes time for tax season
- Consolidate your data collection with a combined accounting and payroll tool
- Automated tax filing frees up your finance team to focus on strategic planning instead of manual data entry, error cleanup, and meeting IRS and state deadlines
- Remove the burden of post-submission support from your team with an easy-to-use self-service portal
“All of these improvements directly impact your bottom line and your company reputation,” says Kerri. “If you rely on contractors, make yourself a contractor-friendly organization.”
That’s because Wingspan was built with contractor management in mind. “We’ve built Wingspan to help with the tax process in as many ways as possible, from contractor onboarding and tax ID verification to a consolidated repository for your payroll, finance apps, or spreadsheets with our integrations so filing is more straightforward,” says Wade. “Wingspan’s 1099 filing tool is the best way to submit and manage these 1099s, from onboarding to post-submission.”
See how Wingspan makes 1099 filing easy >
