Everything Cosmetology Schools Need To Know About 1099's

Cosmetology School Accounting - A Mini-Podcast Series

In This Episode, You’ll Learn:

1. What is a 1099?
   - Explore the purpose of the 1099 form and why it’s essential for non-employee compensation.
   - Learn how the 1099-NEC (Non-Employee Compensation) replaced the older 1099-MISC for services.

2. Who Gets a 1099?
   - Discover which independent contractors and unincorporated vendors qualify.
   - Understand exceptions for corporations, law firms, and rental payments.

3. When to Provide a 1099
   - Get clarity on the January 31st deadline for sending 1099s to vendors and filing with the IRS.
   - Learn the importance of collecting W-9 forms upfront to avoid hassles.

4. Why Provide a 1099?
   - See how timely 1099 filings keep you compliant and maintain transparency with the IRS.
   - Understand how it helps vendors accurately report income and prevents disputes.

5. Consequences of Not Filing
   - Find out how late or missing 1099s can result in fines ranging from $50 to $280 per form.
   - See how audit risks and reputational damage can impact your school.

6. Best Practices for Managing 1099s
   - Use accounting software (QuickBooks, Xero) for automated tracking.
   - Stay organized with regular vendor payment reviews and proper record-keeping.
   - Partner with a CPA for guidance if you’re unsure about compliance.

7. Common Misconceptions
   - Clarify myths like: “I only paid them once,” or “They’re responsible for their own taxes.”
   - Understand how payments via PayPal or credit cards fall under 1099-K rules, not 1099-NEC.

8. Real-Life Scenarios
   - Guest instructors, IT consultants, and unincorporated landlords—all need correct 1099 treatment.
   - Learn from practical examples to ensure every eligible payment is properly reported.

9. Pro Tips for a Smooth Tax Season
   - Plan ahead, verify information early, and educate your staff on 1099 obligations.
   - Leverage technology to reduce errors and time spent manually preparing forms.