It is September and tax season feels far away, but in reality, it is not.
In just a few months hotel operators will be staring down the January 31 deadline for 1099s. That short window is where mistakes add on and pile up.
Missing W-9s, payments that do not line up, penalties that quietly shave off thousands from your bottom line – anything can happen in this short stretch when you have to scramble.
For limited-service hotels, where the same handful of people run the front desk, chase vendors, and keep the lights on, this season can be brutal. Forget one W-9, miss a contractor payment, file late, and suddenly the IRS is at your door.
The fines aren’t small either. And when you are dealing with twenty or thirty vendors, you are staring at money that could have gone toward lobby upgrades or staff bonuses.
Not everyone catches the risk of waiting until the last minute. But hotel operators that follow a clear process and checklist, keep their records clean, and may even move through January without breaking a sweat. In this blog we will give you a practical checklist for 2025 and walk you through the key steps that can save you from both penalties and panic.
And if you are short on time and heavy on workload, we also share an express way out of this tiring process. Read on.
Step 1: Collect Vendor W-9s Now
List out every vendor you have paid this year. The laundry service, the landscaping crew or the HVAC technician – anyone paid more than $600 is probably on the IRS list.
Waiting until January to chase forms is common mistake most operators make. Vendors vanish, emails bounce, phone numbers go dark when you need them (trust us, they do) and when the deadlines arrive you are left chasing the wind.
So, we advise you to start now. Make W-9 collection part of onboarding and keep every document in one secure location. You still have months left, which is plenty of time to fill the gaps.
Step 2: Track Every Payment
PMS, POS, payroll, bank accounts – the hotel payments run through too many systems. Each system shows only a part of the truth, but not all of it, and this is where errors usually creep in.
For example, you pay a contractor half by ACH and half by check. One record shows up, the other slips away. When you file, the 1099 total may not match what the IRS expects.
So, pull everything into one place before January. If you start consolidating now, you will not be digging through half a dozen platforms later.
Step 3: Mark the Deadline & Reconcile Before Filing
Circle January 31, 2025, the deadline for the IRS and for vendor copies. Paper filing is obviously slower and riskier. So, choose electronic filing, but build in a cushion.
Have your forms ready at least a week early is optimal buffer (because something always comes up).
But begin the reconciliation early. The duplicates, unlogged petty cash, missing vendor entries all wait and spring upon you at the last moment, explode into your schedule.
The simplest way to avoid these surprises and get rid of reconciliation headaches is to close the books monthly. So, by the December, most of the work is already done, and January is only the finish.
Step 5: Always, Check State Rules
The IRS is not your only audience. Some states demand their own copies of 1099s, sometimes with different thresholds.
If you use vendors across state lines, check their rules now. Missing a state filing means another penalty notice and altogether a new way to lose both time and money.
Smart Hotels Choose Automation & Avoid the Cost of Waiting:
Penalties range from $60 to $310 per form. So, one mistake hurts a little and then thirty mistakes (not uncommon) hurt a lot.
Now add the hours spent painstakingly spent on fixing the errors and multiply the fines, hotels stand to lose significant amounts of both money and staff energy that should be spent on guests.
For the businesses that run lean in a hyper competitive world, this ridiculous waste can sting even more. And this is exactly why smart hotel operators automate their way through this process with AI-powered accounting tools like Docyt.
Docyt – AI-powered Accounting Automation for Hotels
Manual checklists and traditional processes do work, but they eat time. Every vendor payment logged, every W-9 collected, every account reconciled. Though possible, but draining for small teams already stretched thin.
Docyt’s AI-powered accounting automation simplifies the entire process for you. It connects directly to your PMS, POS, payroll, and bank feeds. Vendor information is automatically updated, payments tracked as they happen. Missing forms flagged immediately, every error is caught before they add on and pile up and accounts are reconciled everyday (checkout- Daily Reconciliation by Docyt).
And by January, most of the work is already finished and the filing becomes only a quick and formal confirmation.
Imagine walking into the lobby in the morning and finding it spotless, because someone already cleaned while you slept, Docyt achieves the same for you, with simple add-ons. Check out our free demo here to know more.
