How to Avoid the Headache of Filing 1099s

for bookkeepers for business owners Jan 20, 2026

When my bookkeeping business was new, 1099s used to stress me out completely. I would start stressing about them around November, even though they're due at the end of January.

If you're a bookkeeper, you know why 1099s are annoying: the deadline is tight, the timing is bad for multiple reasons, and your clients often have bad habits that make them even more stressful to tackle.

But did you know that there are ways you can avoid having to deal with 1099s entirely—and even if they are necessary, there are ways to streamline them so they’re no longer the stressful task they once were?

1099s—Are They Really That Bad?

Honestly, 1099s are not difficult—they're just annoying. And the most annoying thing about them is that they're very avoidable…if your clients do what you need them to do.

If we can get our clients to understand what 1099s are, when they need to file a 1099 and when they don't, and what they need to do, it becomes very easy to position them in such a way that we can streamline the process of sending 1099s…or even eliminate the need for them altogether. But without educating and communicating with your clients, it will be almost impossible to make that happen.

Here are some of the ways you can help your client eliminate the need for 1099s…

How to Avoid 1099s

The problem with avoiding 1099s is that you have to be proactive about it. So if you’re reading this in January, it's a little too late to fix this for the 1099s you need to file this year.

However, this is the perfect time to set yourself up for success next January. If you get ahead of it at the beginning of the year, you’ll have a much less stressful January in 2027.

Pay Contractors Via Processor

One way you can avoid having to deal with 1099s entirely is for your clients to pay their contractors through processors like Stripe or PayPal.

A 1099 is just a form you use in order to inform the IRS that there is taxable income being reported to someone for a business purpose. Your clients are taking a deduction for paying people in their business, so the IRS then wants to make sure that somebody else is picking that up as income.

This means 1099s are only necessary if that contractor’s income is exchanged in a way that the IRS doesn't already know about.

For example, if your client paid this contractor through Stripe, PayPal, or even something like QuickBooks Invoicing, then that contractor is going to receive something called a 1099-K. A 1099-K reports that income, and therefore you and your client don’t need to report through a 1099-NEC.

So if your client paying in one of those ways, then they don't need to file a 1099 at all. They don't need to streamline it or systematize it. It's simply not required.

Pay Through Alternative Software

If your client is not currently paying through one of those methods and they have a contractor (somebody working for them that is not an employee), they can also avoid having to file their own 1099s by using something like Gusto or ADP to pay their contractors.

However, they need to do this all year, and they need to do it cleanly. All those payments need to go through their chosen platform, and then those 1099s will be automatically filed through their software.

These softwares do have nominal fees. But they’re not very expensive, and they’re also completely automated—the money leaves your client’s account, lands in their contractor’s account, is kept track of by the software, then the 1099 is automatically filed at the end of the year.

This totally streamlines the process so that you and your client are not chasing down who was paid what, what the requirements for 1099s are, and what you need to file. There's no clerical aspect. You're able to completely remove that by making it a systematized process.

Educate Your Clients

The best way to deal with 1099s is to get your clients set up with a system. Seems easy enough.

The problem? Some clients are just not that organized.

Clients will often pay their contractors inconsistently. I have some clients that I've had for years who simply can’t be taught to do it any differently.

Sometimes they use Zelle. Sometimes they pay through Gusto. Sometimes that'll take too long, or cash is tight, and they'll pay some other way.

No matter what method they choose, they make the decision to pay in ways that are sloppy, and you end up having to compile it all and figure out if you need to file a 1099 or not, make sure you have the necessary information, etcetera.

If that information wasn't obtained upfront (and clients who have messy processes like this are not proactive about that), you end up chasing down the W9 at the end of the year when it's time to file instead of having that on hand already.

Stressful, right?

If you have just one client, maybe even five clients, and they only have a few contractors, this can be manageable, if obnoxious. However, if your goal is to grow into double digits, it will start to get chaotic very quickly.

Like I said, nothing about this process is strictly hard. However, it is stressful to do under a tight deadline, especially considering it is a tax form that has penalties if it’s turned in late.

The best way to avoid this is to communicate early and cleanly with your client. You want to carefully educate them on 1099s and give them tangible, actionable steps they can take in order to avoid or streamline the process for you.

Copy My Homework

Want to know how I manage this in my business? I just created a resource that will walk you through the whole process + make sure your clients clearly understand how to help you tackle 1099s next year.

Don’t let 1099s turn January into a muddle of non-stop number hunting. Get ahead of it now with the 1099 Client Education System!

EPISODE RESOURCES:

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Learn how to take your bookkeeping skills and turn them into a business that allows you to replace (or surpass) your corporate salary, be present for your life, and profoundly impact your clients without selling your life in the process by joining Life by the Books (LIBBY).

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