Now is a great time to do a W-9 audit!

Most people know they have to give independent contractors a 1099. Here are some other expenses eligible for a 1099: Interest paid on loans, rent, and household employees. A W-9 should be collected before paying these expenses.

More information on Household Employees

Without a W-9 on file, you are obligated to retain 28% of payments to vendors and send the withholding to the Feds.

W-9 Audit

1.  Review all expense accounts that are likely to have 1099 eligible vendors.

2.  Ensure all eligible vendors are flagged for 1099s:  Go to Vendor Center > Edit vendor > See checkbox Eligible for 1099.

3.  Run a 1099 summary report for the current year.  Ignore thresholds.  If you do not have accounts mapped to 1099 boxes yet, choose show all accounts.  This report will show you which vendors are missing a tax ID number.  Request W-9s from these vendors.

4.  When you receive the W-9s back, follow the directions for 1099s for eligibility.  If a vendor is not eligible for a 1099 (corporations and non-profits for instance) uncheck the ‘eligible for 1099’ box in the vendor set up.  Create a vendor type called ‘Corp – No 1099’ or similar.

You can create a custom report in QuickBooks for Corp – No 1099 vendors.  This will help remind you why some vendors are not on the 1099 summary list.

You need the W-9 data on hand to create 1099s. If you have not collected W-9s before payment was made, make sure you collect them before year end.

Requesting W-9s

Send out requests for a completed W-9 to all vendors who are subject to 1099 rules. Remember to include a deadline in your request, such as 1 week from date of request, to ensure you collect all your W-9s before 1099s are due.

If you send requests via paper mail, you may want to include a self addressed stamped envelope to encourage quick replies.

If you send requests via email, ensure you provide vendors with the option to send forms back via paper mail.  Include your address in the email in an easy to cut & paste format.

Form W-9

Create Good Practices

Create an on-boarding process for vendors.  Ensure you do not have to work hard at the end of the year and/or in January.  Create a process to collect W-9s as soon as you start a relationship with a new vendor.  Do not pay until you have a W-9 in hand.

Work with your lawyer to create solid contractor agreements for your subcontractors.  Do they need liability insurance?  Certifications?  Confidentiality and non-disclosure agreements?  All of these things along with the W-9 should be part of your vendor on-boarding process.

Sick Leave Q&A

Q&A with Lindsay N. Malachowski, Attorney at Law.

Are You Ready for Oregon’s New Sick Leave Law?

 Beginning January 1, 2016, most Oregon employers will be required to offer sick leave to employees.

Who is affected?

 Employers with fewer than 10 employees will generally be required to offer up to 40 hours of unpaid sick leave to employees.  Those employers with 10 or more employees will generally be required to offer up to 40 hours of paid sick leave.  Limited exceptions apply.  (Please note, due to a previously-enacted local law, Portland employers have a 6-employee threshold.)

What if an employer already provides sick leave for employees?

 If you already provide your employees with time off through a paid leave policy (e.g. PTO), you will not be required to provide additional paid sick leave.  However, your existing policy must meet the minimum requirements of the law.

Can employees use “sick leave” even if they are not sick?

 Under the new law, employees can use sick leave (paid or unpaid) for various purposes beyond the employee’s own health condition, injury, illness, or preventative care.  Examples include bereavement leave, sick child leave, leave to care for a family member, leave for any purpose permitted under the Oregon Family Leave Act (OFLA), and leave permitted under Oregon’s domestic violence and harassment laws.

How is time accrued?

 Generally, employees accrue sick leave at a rate of one and one-third hours for every 40 hours worked, up to 40 hours per year.  Employees will start to accrue this sick leave on January 1, 2016 or on their first day of employment, if hired after January 1, 2016.

How should employers prepare?

 Review your current leave policies to ensure you are in compliance with the new law for all employees.  It is possible you may have to amend current policies to meet the minimum requirements and/or extend your policies to more employees.  Review your employee handbook to make the appropriate additions or changes, and consult with your attorney.

Lindsay N. (Briggs) Malachowski, Smith, Davison & Brasier, PC, (541) 752-6416. 

QuickBooks Class – Fall Term

QuickBooks 2015 for Fall Term

Classes are at the LBCC Albany campus.

Sign Up Here

QuickBooks Guided Tour

This course is great for people that need to brush up on computer skills before Level 1.

September 29th, October 1st, 2 -4pm, $79

QuickBooks Level 1

We will cover lots of topics and processes in QuickBooks.  Students are encouraged to bring questions from their own experiences to class.

5 Clases – Tuesdays & Thursdays

October 6th – 20th, 2-4pm, $219