How Much Do Accountants Charge for 1099s?

IRS Form 1099 is an information return used to report various types of income received by individuals or businesses, excluding wages reported on Form W-2. These forms document payments like those to independent contractors, rental income, interest, dividends, and real estate proceeds. This article explains the typical costs and factors for hiring an accountant to prepare and file 1099s.

Factors Influencing Accountant Fees for 1099s

The total number of 1099 forms an accountant prepares directly impacts the overall fee. Accountants often charge a base fee plus an additional amount per form, so more forms generally lead to higher costs. Businesses typically issue a Form 1099-NEC for each independent contractor paid $600 or more for services, while other payment types, like rents or royalties over $10, may require a Form 1099-MISC.

Transaction complexity also influences the accountant’s time and fee. Different income types, such as non-employee compensation, rents, interest, or real estate proceeds, are reported on various 1099 forms (e.g., 1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, 1099-S). Transactions with multiple income categories or unique reporting requirements increase the work involved.

The quality of client records significantly impacts the accountant’s fee. Well-organized, accurate, and complete records—including recipient names, addresses, Taxpayer Identification Numbers (TINs), and payment amounts—reduce the accountant’s time. Disorganized or incomplete data, requiring the accountant to sort, reconcile, or track down missing information, increases time and cost.

Additional services beyond basic preparation and federal e-filing add to the overall cost. These include state-specific 1099 filings, mailing physical copies to recipients, responding to IRS notices, or providing consultation on complex reporting requirements. State filing requirements vary, with some states having different thresholds or deadlines than the federal IRS.

An accountant’s experience and geographic location also affect their charges. Highly experienced Certified Public Accountants (CPAs) or those in high-cost-of-living areas may charge more. Hourly rates for CPAs range from $150 to $450, with some senior professionals charging higher rates.

Common Fee Structures

Accountants commonly use a per-form fee structure for 1099 services, with a set price for each form prepared (e.g., 1099-NEC or 1099-MISC). Prices typically range from $25 to $50 per form, often with a base setup fee. Some firms offer a slightly lower rate for larger volumes.

Another common fee structure is an hourly rate, especially when client records are disorganized or complex issues arise. Accountants may charge $95 to $450 or more per hour, depending on experience and work complexity. Time spent organizing data, researching payment classifications, or addressing discrepancies is billed accordingly.

Some accounting professionals offer bundled services or flat fees for a predetermined number of forms. A flat fee might cover preparation, federal e-filing, and recipient distribution for a single price, providing cost predictability for clients with consistent form volumes.

Many accountants implement minimum fees for 1099 engagements. This covers administrative overhead and initial review time, applying even for one or two forms. Always obtain a clear upfront quote or estimate, understanding precisely what services are included.

Information to Prepare for Your Accountant

To streamline 1099 preparation and potentially reduce costs, gather specific information for your accountant beforehand. For each recipient, provide their full legal name, complete mailing address, and Taxpayer Identification Number (TIN). The TIN is typically a Social Security Number (SSN) for individuals or an Employer Identification Number (EIN) for businesses.

Accurately track and provide the total amount paid to each recipient during the tax year, categorized by income type. This includes non-employee compensation, rent, royalties, or other miscellaneous income that meets IRS reporting thresholds. Precise amounts prevent delays and potential errors.

Noting specific payment dates can be helpful, especially if payments spanned different calendar years. While reporting is based on calendar year payments, precise dates assist with reconciliations. Having prior year’s 1099 forms or related tax documents also provides valuable context, particularly for recurring payments.

Relevant contracts or agreements (e.g., with independent contractors or for rental payments) assist the accountant in classifying payments and addressing ambiguities. Collecting IRS Form W-9 from each vendor or contractor before making payments is recommended, as it provides necessary recipient information, including their TIN, for accurate 1099 reporting.

The Accountant’s 1099 Service Process

Once the client provides all necessary information, the accountant reviews the submitted data for accuracy and completeness. This initial review identifies missing details or potential discrepancies affecting proper reporting. The accountant then inputs verified information into specialized tax software to generate IRS forms.

Following data input, the accountant prepares the 1099 forms, such as 1099-NEC for non-employee compensation or 1099-MISC for miscellaneous income like rents. The software populates forms with the client’s business information (as payer) and recipient details and payment amounts. Each form is checked to ensure it reflects the correct income type and amount.

After preparation, the accountant handles electronic submission to the IRS. Most 1099 forms, including 1099-NEC, have a January 31 filing deadline for both recipient copies and IRS submission. Other forms like 1099-MISC have a recipient copy deadline of January 31, but the IRS filing deadline can be February 28 for paper filing or March 31 for e-filing.

The accountant also manages copy distribution to recipients, typically by electronic access or mailing physical copies. For 1099-NEC, the recipient copy must be furnished by January 31. Many states have their own 1099 filing requirements; if applicable, the accountant handles these state-specific submissions, which may have different deadlines or formats.