How Startup Founders Should Handle Contractor Payments and 1099s
Startups often rely on independent contractors-developers, marketers, designers-to move fast and stay lean. But many founders forget one critical task: tracking contractor payments and issuing 1099s correctly. Here’s how to stay compliant and audit-ready.
Download Our Free Brochure →What Founders Need to Track
1. Contractor Info (W-9 Form)
- Collect W-9s before issuing first payments
- Store EIN, business name, and address securely
2. Payment Totals by Contractor
- Track total paid across all platforms (PayPal, ACH, check, etc.)
- Note: $600+ triggers 1099-NEC requirement
3. Expense Classification
- Distinguish contractor services from employee wages or reimbursed costs
- Avoid IRS misclassification
4. Project Tags (Optional)
- Tag payments by project or department to track ROI
Test Case
A startup used 11 contractors but hadn’t collected W-9s or tracked total payments. RemoteBooksOnline:
- Organized 12 months of payments across PayPal, Wise, and ACH
- Collected and validated W-9s
- Filed all 1099-NECs ahead of IRS deadlines with zero penalties
Compliance Notes
- 1099-NEC is due to contractors and the IRS by Jan 31
- Payments via Zelle, ACH, check must be included
- Stripe, PayPal, or Venmo may issue their own 1099-K (still verify totals)
Need help managing your 1099s? Our startup bookkeeping services handle contractor tracking and filing for you.
Startup Bookkeeping Services Across States
Startup Bookkeeping Services Across Key ZIPs
Download Our Free Brochure →FAQs
Do you collect W-9s for my contractors?
Yes. We’ll request and store them securely.
Do you file the 1099s for me?
Yes. We handle preparation and e-filing with the IRS.
What if I paid them using multiple platforms?
We consolidate all payments to calculate accurate 1099 totals.
Don’t let contractor compliance become a tax-time scramble. RemoteBooksOnline keeps your startup on track.
