Form 1099 FAQ

It’s that time of the year again when you as a practice owner need to start thinking about 1099s. We have created this FAQ for all things 1099. The process starts with a Form W-9. We will create and file your 1099s but we do need your help collecting information found on Form W-9. Please note 1099s are only for payments made via cash, check, and EFT payments. Therefore, we encourage you to make all payments via credit or debit card.

What exactly is Tax Form W-9 and what are they used for?

According to the Internal Revenue Service (IRS), if your company uses people for contract work (such as freelancers or subcontractors), you will need to require them to fill out a W-9 Form. This is completed so their taxpayer information is on file (in the event you will need to fill out a 1099 Form (for reporting of payment for services provided by non-employees). You should request a W-9 form for anyone doing contract work for your company.  Best practice is to require a completed form in exchange for their payment from you vs. waiting until the end of the year when they could be harder to track down.

Who needs to use Tax Form W-9?

This form is for:
  • Independent Contractors
  • Freelancers
  • Anyone who works for themselves
Examples for YES for a W9: Landlords, Landscapers, Janitors, Temporary Help and Labs.   Examples of NO’s to the form are: Employees, Merchandise, Supply Companies, most corporations   Note on Corporations – Most corporations do not receive 1009s. If a Form W-9 is received from a vendor who is a corporation we can omit. The exception to that is landlords and attorneys. No matter their legal structure landlords and attorneys always get a 1099.  

WHEN IN DOUBT GET ONE FILLED OUT!

  ** It’s important to note Form W-9 is not required for independent contractors who are not U.S. citizens and U.S. resident aliens. In those cases, a Form W-8 may be required.

Is there a minimum amount to report?

Yes, there is. The minimum amount to report is $600. If, in one calendar year, you pay a freelancer or subcontractor anything under $600, you do not need them to fill out the Form W-9. However, if you pay someone $600 or more, you will need to file a Form 1099.  

What is required on the form?

This form is straight forward. It requires a name, address and Social Security number (or Employer Identification Number).  

What are some helpful links regarding the W-9 Form?

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