Have you paid anyone who is not your employee in 2020? If so, you may be required to send them a 1099 form and file the information with the IRS.
When is a 1099 required?
In general, you need to provide and file a 1099 if you paid a contractor $600 more in the course of your trade or business during the year. For other guidelines, see the instructions to the form: https://www.irs.gov/forms-pubs/about-form-1099-nec
You don’t need to send a 1099 if the W-9 form Part 3 is marked as a C-Corporation, S-Corporation, or the LLC is taxed as C-Corporation or S-Corporation.
The due date for you to send the 1099 form to all contractors and file with the IRS is January 31st.
However, for us to file it by the due date, we need to receive it from you no later than January 15th.
Please send the W-9 and the amount for each contractor, or the following information:
- Legal Name
- EIN, ITIN, or Social Security Number
- $ Amount
In addition, please let us know if you would like us to send the 1099s to you, so that you can then distribute them to your contractors or if you would prefer that we mail them directly to the recipients. Please verify the addresses listed are still current for all contractors.
Please obtain a W-9 form from your contractors before making any payments to them. This ensures you have all the required information for 1099 reporting. You can download the latest form from the IRS website: https://www.irs.gov/forms-pubs/about-form-w-9
The biggest issue we see with filling out the W-9 form is with contractors who do not have a corporation or LLC. For those individuals, their legal name must be on Line 1, which must match the name on their 1040 individual tax return. This is especially confusing for those who have a D.B.A. – they must enter their first and last name on Line 1, and then the DBA name on Line 2, and include their SSN or ITIN below.
If you are on our Advantage or Premium Bookkeeping plan, there is no additional charge for this service. Otherwise, the cost is $50 plus $7.50 for each 1099. The cost is the same whether we send you the forms and you hand it to your contractors or you’d like us to mail the 1099 forms directly to your contractors’ home.
Please let us know your preference:
- You would like a PDF that you will print and hand out the 1099 forms to your contractors
- You prefer a package with printed forms in envelopes that you can hand out to contractors
- You would like us to mail the 1099 forms directly to your contractors’ home
Please let us know if you have any questions or concerns.
-Your friendly staff at Caputa & Associates, Ltd.