Today TaxMama hears from Lisa in San Diego, CA who’s perplexed. “I work for a small financial service company as an accountant. Where can I get ‘easy to understand’ rules or criteria for which vendors I need to generate 1099 forms. Any help would be appreciated.”
Well Lisa
It’s pretty simple. You issue 1099s to anyone who receives dividends or interest.
Then, when it comes to 1099-MISC – issue them to any person or partnership who performs any service and gets paid $600 or more.
You don’t need to issue 1099s to corporations, except to attorneys’ legal corporations and to medical & health care providers. (IRS seems to have discovered too much unreported income by attorneys and physicians.)
You do issue 1099s to partnerships. But how would you know if they are partnerships or corps or independent?
Well, you’d know when they fill out the Form W-9 you give all your service and rent providers
https://www.irs.gov/pub/irs-pdf/fw9.pdf
You issue 1099s for rent. That includes website rent and server space rent. Unless they’re rented from corporation.
See how simple this is? Of course, then there’s the question of – Do you issue 1099s to LLCs? Well, if they are operating as a partnership, I would. Technically, since LLC stands for Limited Liability Corporations and you don’t need to issue 1099s to corporations, you shouldn’t have a problem if you don’t give them 1099s.
What else do you need to know? IRS’s instructions for the 1099-MISC might be helpful???
https://www.irs.gov/instructions/i1099msc/index.html
And, remember, you’ll find answers to questions about your payroll and other tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Form W-9 :: Request for Taxpayer Identification Number and Certification
- IRS Form 1099-MISC :: Online Instructions
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