Year-End W-2 and 1099 Checklist for Kalamazoo Small Businesses

Every January, small business owners across Kalamazoo find out how good their books really were. W-2s and 1099s pull a full year of payroll and vendor payments onto a handful of forms, and they're due fast. If a contractor's address is missing or a payroll entry never got recorded, you'll be chasing it in the busiest weeks of the year.

The good news is that most year-end trouble can be fixed in November and December, when there's still time. This checklist walks through what I review with small businesses before the new year, so January is about filing forms, not hunting for information.

Why year-end prep starts now

The deadlines come early. According to the IRS General Instructions for Forms W-2 and W-3, 2026 Forms W-2 and W-3 must be filed with the Social Security Administration by February 1, 2027, and employees must get their copies by that same date. For contractors, the IRS information return reporting page says Form 1099-NEC is due by January 31 of the year after the payments were made, both to the IRS and to the person you paid.

That leaves only a few working weeks after the holidays. If your books are current and reconciled through November, December is a short month of cleanup. If they're months behind, the forms will be late or wrong.

Part 1: Payroll and W-2 checklist

If you have employees, your W-2s are only as accurate as the payroll records behind them. Before the last payroll of the year, work through these items:

• Confirm every employee's legal name, address, and Social Security number. People move and change names. Ask employees to review their information now, while you can still fix it before forms print.
• Review year-to-date wages and withholding for each employee. Compare your payroll reports to what your bookkeeping shows as wage expense. If they don't match, find out why before December 31.
• Record any bonuses, gift cards, or other extras through payroll. Holiday bonuses are wages. Run them through payroll so taxes are withheld and they land on the W-2.
• Check fringe benefits. Things like personal use of a company vehicle or health insurance for S corporation owners can affect W-2 amounts. Flag them for your payroll provider or accountant early.
• Make sure each quarterly payroll return ties to the year. Your four quarters of federal payroll filings should add up to the totals on your W-2s. Mismatches are much easier to sort out in December than after the IRS sends a notice.
• Note anyone who left during the year. Former employees still get a W-2, so confirm you have a current mailing address for them.

Part 2: Contractor and 1099 checklist

1099s cause more year-end scrambling than W-2s because contractor information often isn't collected until someone needs it. Here's how to get ahead of it:

• Pull a list of everyone you paid who isn't an employee. Run a vendor report for the year and look for individuals, sole proprietors, partnerships, and LLCs you paid for services.
• Collect a Form W-9 from each one. The W-9 gives you the contractor's legal name, tax ID number, and address. If you don't have one on file, ask for it now. It's a much easier conversation in November than in late January.
• Separate how you paid them. Payments made by credit card or through some payment apps may be reported by the payment company instead of by you. Your bookkeeping should show how each contractor was paid so you know which payments belong on your 1099s.
• Check totals against the reporting threshold. The IRS requires a 1099-NEC when payments to a contractor reach the reportable threshold for the year. The threshold amount is set in the current IRS instructions for Forms 1099-MISC and 1099-NEC, so confirm it for the 2026 tax year before you decide who gets a form.
• Know which form applies. Payments for services generally go on Form 1099-NEC. Other types of payments, like rent, may belong on Form 1099-MISC, which has different filing dates. The IRS information return reporting page lists both.

Part 3: Michigan withholding and annual returns

Michigan employers have state paperwork too. According to the Michigan Department of Treasury's withholding tax page, withholding returns are filed monthly, quarterly, or annually depending on the frequency Treasury assigns. Quarterly filers' fourth-quarter return is due January 20, and every filer must also submit an annual return by February 28. If a due date falls on a weekend or state holiday, the return and payment are due the next business day.

The annual return reconciles the Michigan income tax you withheld during the year, so it needs to agree with your W-2s and payroll records. Michigan also expects state copies of W-2s and certain 1099s. Treasury's withholding page links to its income record form remittance guide, which explains how to send them.

A quick way to stay on track is to compare your Michigan withholding payments for the year to the Michigan withholding shown in your payroll reports. If those two numbers agree in December, the annual return is usually simple.

Part 4: Close out the books for the year

W-2s and 1099s come straight from your books, so the last step is making sure the books themselves are complete:

• Reconcile every bank and credit card account through November. Then reconcile December as soon as the statements arrive.
• Clear out uncategorized transactions. A payment sitting in "ask my accountant" might be a contractor payment that needs a 1099.
• Record owner payments correctly. Owner draws, distributions, and owner wages are treated differently. Make sure each is recorded where it belongs, especially if you're an S corporation.
• Save your year-end payroll and vendor reports. Keep a copy of the reports you used to prepare the forms. If a question comes up later, you'll know exactly where each number came from.

If your books are several months behind, start there. Our catch-up bookkeeping work brings past months current in order and reconciles the accounts, which gives you a solid base for year-end forms.

A simple timeline

• November: Request missing W-9s, confirm employee information, and get bank and credit card reconciliations current.
• December: Run bonuses through payroll, review year-to-date payroll totals, and flag fringe benefits.
• Early January: Reconcile December, finalize contractor totals, and prepare W-2s and 1099s.
• By the deadlines: File and furnish W-2s and 1099-NECs, then file Michigan's fourth-quarter and annual withholding returns on time.

How JRK Financial helps

Our payroll service covers payroll run through Gusto, quarterly payroll tax filings, and year-end W-2s and 1099s, all coordinated with your bookkeeping so the numbers on the forms match the books. If you want a fuller picture of what ongoing payroll involves, read Payroll for Kalamazoo Small Businesses: What It Really Involves.

FAQ

When are 2026 W-2s due?

The IRS instructions for Forms W-2 and W-3 say 2026 W-2s must be filed with the Social Security Administration and given to employees by February 1, 2027.

When is Form 1099-NEC due?

The IRS says Form 1099-NEC is due by January 31 of the year after the payments, both to the IRS and to the contractor.

Do I need a W-9 from every contractor?

It's best practice to collect a W-9 before you pay a contractor. It gives you the name, tax ID, and address you need to prepare an accurate 1099.

Does Michigan have its own year-end filing?

Yes. Michigan Treasury requires every withholding filer to submit an annual return by February 28, in addition to any monthly or quarterly returns.

What if my books are behind?

Get them caught up first. Accurate W-2s and 1099s depend on complete, reconciled records.

Get ahead of January

If you'd like help getting your payroll and contractor records ready for year-end, I'm happy to talk it through. Send me a message or call 269-200-2910. JRK Financial is based in Kalamazoo, Michigan, and works with small businesses across West Michigan.