1. Choose the paying business and tax year
A preparation should have a clear boundary: the legal business making the payments and the calendar year those payments belong to. Keep separate businesses separate, even when they share an owner or accountant.
Choose the year before importing records. A statement downloaded in January may contain December payments. The download date does not determine the reporting year. The reporting threshold changed for 2026, so applying one remembered dollar amount to every year can lead to mistakes.
Sources: Instructions for Forms 1099-MISC and 1099-NEC · Am I required to file an information return?
2. Collect and review contractor tax details
A completed W-9 helps establish a U.S. payee’s name, taxpayer identification number and federal tax classification. Match the actual taxpayer identity to your vendor record; a trading name or bank description can look different.
Do not decide that an LLC is exempt merely because “LLC” appears in its name. Use the federal tax classification and applicable reporting rules. Missing forms, conflicting names and foreign-payee documentation belong on a review list.
- Paying business legal name, address and taxpayer ID.
- Contractor legal name, any business name, address and taxpayer ID.
- The latest relevant tax document and any explanation of changed details.
Sources: About Form W-9 · Instructions for the requester of Form W-9
3. Reconcile all payment sources
Bring together records from every account used to pay the contractor, including checks, transfers and separately recorded cash payments. Check statement coverage month by month. Importing one bank account is not evidence that the annual total is complete.
Keep a link from each total back to its source rows. If two downloads contain the same transaction, count it once. A useful review identifies both duplicates and gaps; a plausible-looking annual number alone does neither.
- Check account and month coverage.
- Match recipients and review ambiguous descriptions.
- Flag overlapping exports and repeated transactions.
- Keep invoices as supporting evidence of the work, not a second payment feed.
4. Separate payment methods and unpaid invoices
Consider this fictional 2026 example: a U.S. sole proprietor supplied ordinary business services, the amounts below are separate transactions, and the credit-card payment is a reportable payment-card transaction under the settlement rules.
| Record | Amount | Treatment in this example |
|---|---|---|
| ACH service payment | $1,200 | Direct service payments |
| Check for services | $800 | Direct service payments |
| Second ACH service payment | $1,000 | Direct service payments |
| Credit-card service payment | $900 | Separate payment-card reporting route |
| Invoice still unpaid | $500 | No payment yet |
| Direct service-payment total | $3,000 | Review for 1099-NEC reporting |
5. Resolve exceptions and prepare the handoff
Review reimbursements, mixed goods-and-services charges, refunds, withholding and unclear recipients with your accountant. Do not silently force them into a clean total. If you replace a calculation with a manual annual amount, keep the reason and the records supporting it.
Keep contractor details, payment totals, excluded records, source references and open questions available for review. Beside uses reviewed information to complete 1099-NEC recipient Copy B and includes IRS recipient instructions. Downloading the form does not submit anything to the IRS.
Then choose your filing route. Your accountant, a filing provider or the IRS IRIS portal can handle the next stage. Confirm recipient delivery and submission status separately.
Sources: E-file information returns with IRIS · Publication 1099: General instructions for information returns
Common questions
Can I prepare 1099s from bank statements?
Statements can support the payment total, but they may not reveal the legal taxpayer, payment purpose, reporting treatment or payments made elsewhere. Match them with tax documents and review the gaps.
Do I need every contractor invoice?
Invoices are useful evidence of the work and charges. The preparation still needs the actual payment history, so an unpaid invoice is not added as another payment.
Does Beside file the forms for me?
No. The tool generates a completed 1099-NEC recipient Copy B for supported ordinary contractor payments. IRS filing and recipient delivery are separate steps.
Sources & scope
Written by Beside for U.S. businesses preparing contractor records. IRS sources were checked on September 11, 2026. This is general guidance, not a determination of your tax obligations. Check the instructions for the relevant year and ask your preparer about exceptions.
- IRS: Instructions for Forms 1099-MISC and 1099-NEC
- IRS: Am I required to file an information return?
- IRS: About Form W-9
- IRS: Instructions for the requester of Form W-9
- IRS: E-file information returns with IRIS
- IRS Publication 1099: General instructions for information returns
Examples are fictional. Beside generates recipient Copy B for supported ordinary contractor service payments. It does not file returns, provide paper-filing Copy A, or handle withholding and special reporting.
