Sending 1099-MISC

 

Today TaxMama hears from Sue in the TaxQuips Forum with a timely question. “I was wondering if LLC’s are exempt from getting a 1099 MISC form from our company?”

 

 

 

 

 Dear Sue,

Rita Lewis, EA in Fairfield County, CT provides a good answer.  She says:

Look at the Form W-9 you got them to send you.  If a corporation, either C or S, then you do not have to issue a Form 1099-MISC; however, you can.  To any entity other than a corporation, you must issue Form 1099 if they meet or exceed the minimum dollar amount, $600, for the type of payments you made to them, and can issue for lower amounts. The instructions are very thorough.

TaxMama adds. If the company if a legal or medical corporation, you will need to issue them a 1099-MISC, as well.

You should start each new year, and each new vendor relationship with a Form W-9. If you do this before you issue the first check of the year to the vendor, you will get two instant benefits.

1)      The vendors will know, from the outset, that the money they are receiving will be taxed – and can quote their rates accordingly. This will avoid those nasty, sometimes violent confrontations at the beginning of the following year when you are trying to get 1099s done.

2)      You will have a record of their business entity, even when they are LLCs. You will know if they file as individuals, partnerships or corporations. That will help you determine if they should get a 1099 or not.

And remember, you can find answers to all kinds of questions about 1099s and other tax issues, free. Where? Where else? At www.TaxMama.com.

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2 thoughts on “Sending 1099-MISC

  1. TaxMama says:

    Hi Meg,

    Yes, you’re right – if the LLC is an S Corp, then you need to issue a 1099.
    That’s why we ask for the Form W-9. It tells the payer how the LLC is being reported for tax purposes.

    Hugs
    Eva

  2. meg schell says:

    What if the person to whom she is questioning a 1099 be sent is a Single Member LLC being taxed as an S Corp? I thought then a 1099 was required?

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