Why Now Is the Best Time to Gather W-9s and 1099 Info

Save future stress — best practices for vendor documentation

As the second half of the year unfolds, tax season might feel comfortably distant—but in reality, the groundwork for a smooth year-end starts now. One of the most overlooked, yet essential, pieces of that groundwork? Collecting W-9s and organizing 1099 information for your vendors.

Waiting until January to chase down this documentation leads to avoidable stress, rushed emails, and potential IRS penalties. Getting proactive in Q3 or Q4 isn’t just smart—it’s strategic.

Here’s why now is the ideal time to get your vendor paperwork in order, plus best practices to make it as efficient and painless as possible.

Why W-9s and 1099s Matter (and Who They Apply To)

Before diving into timing, let’s clarify the basics:

• Form W-9 is an IRS document used to collect a vendor’s Taxpayer Identification Number (TIN), legal name, and tax classification.

• Form 1099-NEC is used to report payments of $600 or more to non-employees (e.g., freelancers, consultants, independent contractors) for services rendered during the tax year.

If your business paid a vendor who is not a corporation and not on your payroll, there’s a good chance you’ll need to file a 1099-NEC. Not having accurate W-9 information on file can delay filing or lead to incorrect forms—which can trigger IRS penalties.

🧠 Important: The IRS deadline for filing Form 1099-NEC with the IRS and providing copies to recipients is January 31—with no automatic extension.

Why You Should Gather W-9s Now, Not Later

1. Avoid the January Scramble

Come January, your team is already busy closing the books, processing W-2s, and preparing for tax filings. The last thing you want is to chase vendors for tax info when they’re also swamped—or possibly unresponsive.

Collecting W-9s as soon as a vendor is onboarded is best practice, but if you haven’t done that this year, now is the perfect time to catch up.

2. Catch Incomplete or Invalid Info Early

W-9 errors are common—missing signatures, incorrect TINs, or mismatched legal names can all cause IRS rejections when you file 1099s. By reviewing forms now, you give yourself time to correct issues without deadline pressure.

If you use e-filing software or a payroll service, you may also be able to validate TINs in advance through the IRS TIN Matching program—helping you avoid costly backup withholding requirements.

3. Stay Compliant and Minimize Risk

The IRS imposes penalties ranging from $60 to $310 per incorrect or late 1099, depending on how late the form is filed. These penalties can add up quickly, especially for businesses with many contractors.

Worse, if you don’t file at all, the penalty can jump to $630 per form. Gathering documentation now helps ensure you don’t miss anyone in January.

Best Practices for Gathering W-9s and 1099 Information

✅ Request W-9s Up Front

Make it part of your vendor onboarding process: no payment until a completed W-9 is on file. This one habit can save countless hours later.

✅ Keep Digital Records Secure

Store W-9s in a secure, centralized system—whether that’s accounting software (like QuickBooks or Xero), a password-protected drive, or a secure cloud-based document manager.

✅ Track Vendor Payments Throughout the Year

Your accounting system should flag which vendors qualify for 1099-NEC filings (based on payment thresholds and tax classification). If not, start tagging eligible vendors now so you’re not combing through transactions manually later.

✅ Communicate with Vendors in Advance

If you’ve paid a contractor $600 or more this year, now is a good time to remind them that they’ll be receiving a 1099-NEC. It opens the door for corrections, name changes, or address updates before filing.

✅ Double-Check Corporate Status

You generally don’t need to issue 1099s to C corporations or S corporations, with a few exceptions (such as legal or medical service providers). The W-9 will indicate a vendor’s tax classification, so reviewing those forms now can prevent unnecessary filings.

Final Thought: Proactivity Is Peace of Mind

Managing vendor tax documentation doesn’t have to be a last-minute headache. Gathering W-9s and organizing 1099 info now gives your business a head start—and helps you avoid the January scramble, IRS penalties, and unnecessary stress.

Think of it like financial spring cleaning: simple, smart, and surprisingly satisfying. Your future self (and your accountant) will thank you.