Working with our small business clients, I'm finding that the 1099 requirements seem confusing. Most business owners know that you're required to complete a 1099-MISC reporting form for an independent worker or unincorporated business if you paid that independent worker or business $600 or more in total for the year.
Who is considered in this category? This can include a commercial cleaning service, a landscaper, a technology expert, a subcontractor, and even your office landlord. In general, you are expected to send 1099-MISC forms to most small-business LLCs. The tax law looks at whether they are incorporated: an LLC (limited liability company) is not the same as a Corporation.
I suggest getting new vendors to complete W-9 forms as soon as you begin working together. This way, it's not a scramble at year end to figure out who gets one. The vendor indicates on their W-9 how they are set up for taxes and then you can easily determine requirements along with your CPA.
1099 Questions from Small Business Owners
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