It’s W-9 and 1099 Season

By: Donna Ray Berkelhammer. This was posted Monday, January 23rd, 2012

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If your business needs to issue a 1099 Form to a contractor or vendor, it is time to get a W-9 Form on file for each entity.  The W-9 gathers the information needed to document 1099 eligibility, the taxpayer ID number, and a current mailing address. The 1099 form must be submitted to the taxpayer by January 31st and to the IRS by February 28th.

Seal of the United States Internal Revenue Ser...

The W-9 form can be downloaded here: http://www.irs.gov/pub/irs-pdf/fw9.pdf

Who gets a 1099 Form?

  • Non-Employee Compensation or Independent Contractor. Businesses are required to file Form 1099-Misc for amounts of $600 or more paid for repairs, maintenance or other services performed by non-employees.  If you’ve hired carpenters, handymen, plumbers, electricians, accountants, landscapers or paid for other services from non-employees, have the contractor provide a W-9 and issue a 1099-Misc.
  • Rents.  Rents collected in more than $600 in 2011 require a 1099-Misc, unless such rents are collected by a real estate agent.
  • Royalties.  Royalties collected of $10 or more  in 2011 require a 1099-Misc.
  • Gross Proceeds Paid to an Attorney.  If your business paid $600 or more in legal fees (even if it was for another entity), you need to file a 1099.  The exemption from reporting payments made to corporations do not apply to payments for legal services.

For more information, contact your tax attorney, your CPA or the following IRS Publication: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

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