The Contractor 1099 Checklist Every Vet Practice Should Follow

As year-end approaches, many veterinary practices start to feel the pressure of tasks that quietly built up over the year.

One of the most common examples is 1099 reporting. It often sits in the background until late fall, then suddenly turns into a time consuming and expensive scramble in January.

In this piece, we’ll walk through how practices can take a much calmer approach to contractor compliance. With a few simple habits put in place early, 1099 reporting can stay manageable year after year.

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Why 1099 Planning Starts Earlier Than You Think

Forms 1099 tend to feel like a year-end task, but the real work should begin the moment a contractor is engaged. Anytime a practice pays for services such as repairs, temporary help, or other non-employee work, the responsibility for determining whether a 1099 is required falls on the business making the payment.

Many practices wait until December or January to review transactions and sort out which vendors need forms. By then, the challenge is not just the paperwork. It is tracking down information that should have been collected months earlier.

The Role of the W-9 and Why Timing Matters

The simplest and most effective step is collecting a W-9 as soon as a contractor relationship begins. Before the first payment is issued, the contractor should complete and return the form. At that point, providing the information is still a priority for them.

Once payment has already been made, the dynamic changes. The request for a W-9 can quickly drop to the bottom of their to-do list. Getting the form upfront avoids repeated follow-ups later and keeps the practice in control of the process.

Avoiding the January Vendor Chase

Anyone who has handled 1099s has seen the January scramble. Deadlines are approaching, vendors are unresponsive, and some may no longer be working with the practice at all. In some cases, vendors simply disappear when contacted for tax information.

By gathering W-9s early and keeping them organized, practices avoid relying on last minute outreach. The reporting process becomes about reviewing information rather than hunting it down.

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Contractor Versus Employee Considerations

Another topic that frequently comes up is whether someone should be treated as a contractor or an employee. This decision carries more weight than many realize. There are established guidelines and resources that outline how the distinction should be made, and professional advice can help when situations are unclear.

One common misstep is treating short trial periods as contractor work. Bringing someone in for a day or two to see if they are a good fit still typically counts as employment. If reviewed later, agencies may expect payroll taxes and other withholdings to have been paid, even for a brief period.

Organizing Vendor Information for Smoother Reporting

Once W-9s are collected, organization makes all the difference. Keeping vendor forms in a single, easy to access location allows for quick handoff to whoever prepares the 1099s. Within accounting software, flagging vendors and accounts that are subject to 1099 reporting helps generate accurate year-end reports with minimal effort.

These steps may take some time to set up initially, but they pay off every year. With clear processes in place, 1099 reporting shifts from a stressful obligation to a routine part of closing out the year.