When you change your business structure, updating payment information with clients or employers is simple! Follow these steps to make sure all payments go to your new business account.

This section is designed for individuals with self employed or 1099 income who have recently changed their business structure. For example, if you were previously operating as a sole proprietor and have now formed an LLC with an EIN and a separate business bank account, your payor (e.g., groups, hospitals, or agencies) will need your updated business information for payments.

Step 1: Notify Your Clients or Payor

What to do:

  • Send an email to the accounts payable department or your contact.

What to include:

  • New business name (e.g., "Dr. Smith LLC")
  • Your EIN (Employer Identification Number)
  • The effective date for the change, ideally the first day of a month or quarter, and ask the payor to confirm which payments will be reported under the old versus new information for the year.
  • A request to update their records

The goal is for the year-end 1099 to be issued to the entity (or to you, if your LLC is disregarded) exactly matching the W-9 you submit in Step 2, so nothing bounces at tax time.

Step 2: Submit a New W9 Form

Why: A new W9 ensures payments are reported correctly under your business entity.

How to do it:

Download a W-9 form from the IRS website for the current tax year.

How you fill it out depends on how your LLC is taxed.

  • If your LLC elected S corporation status (most of our clients after onboarding): line 1 is the LLC's name, line 3 is Limited liability company with S in the classification box, and the TIN is the LLC's EIN.
  • If your LLC is a single-member LLC with no corporate election (a disregarded entity): line 1 must be YOUR name, line 2 is the LLC's name, and the IRS wants your SSN (or your own EIN), not the LLC's EIN.

Getting this wrong is the top cause of 1099 name/TIN mismatch notices.

Send the updated W9 to all companies that pay you.

Step 3: Update Contracts (If Necessary)

Why: Some contracts may list your personal name and SSN. If so, they'll need to reflect your new entity.

What to do:

  • Review your contracts.
  • Request an amendment from your client, updating the payee information to your new business name and EIN.

Step 4: Confirm Payments and Track Them

What to do:

  • Check that payments are being deposited into your new business bank account.
  • Track your payments: Ensure you are maintaining accurate records of all payments received into your new entity's account. This can be done using a simple accounting tool or spreadsheet.

If there's any issue or delay with payments, reach out to the accounts payable department of your clients to resolve it.

Summary

By following these steps, you can smoothly transition your payment process after forming an LLC or other entity, ensuring compliance and seamless financial operations.