·
The IRS Form W-9 is used to obtain
independent contractors’ tax ID numbers.
·
Tax ID numbers are required when filing
1099s.
·
1099-MISCs must be issued to
independent contractors that are paid $600 or more during the year for
performing services for a trade or business.
It
is not uncommon to have a repairman out early in the year, pay him less than
$600, then use his services again later and have the total paid him for the
year exceed the $600 limit. If this
happens, you may overlook the information needed to file 1099s for the
year. Therefore, it is good practice always
to have individuals complete and sign the IRS Form W-9 the first time you use them. This eliminates oversights and protects you
against IRS penalties and conflicts.
Many small business owners and landlords overlook this
requirement during the year, and only realize in January that they have not
collected the required documentation to issue 1099s. If you have not collected W-9s throughout the year, do so before year’s end, so you will have them available when it comes time to prepare 1099s for the year. It is sometimes difficult to acquire contractor information after the fact, especially from those contractors with no intention of reporting the income, so it’s always better to get it up front.
Form W-9 provides entries for the contractor’s name, contact information and tax ID number. It also includes a signature block for the contractor, certifying the information and insulating you against penalties if he or she provides an incorrect or phony ID number.
If you have questions or need copies of
the Form W-9, please call our office. Our office can also assist you with your 1099 filing requirements next January.
(601) 649-5207
0 comments:
Post a Comment