Who Receives 1099s?

Conference room - 1099s

If every person or entity your business contracts with is a corporation, no 1099 is needed. (Hence, the empty conference room!)

It’s almost that time again! Who will you (or your accountant or bookkeeper) send 1099 forms to in January 2016? I thought now was a great time to reiterate that doing everything correctly upfront makes the 1099 issuance process so much easier. Today, I’m focusing on 1099s from a tax perspective.  (However, in the next post, I will focus on the steps to take to protect yourself and your firm from the potential re-classification of independent contractors as employees, given the lawsuits filed by individuals at various firms and the judicial rulings that have recently been issued.)

Please click on one of the two YouTube videos below for a brief 4-5 minute overview of what you need to do IN ADVANCE to ensure that you have (your company has) absolutely no problem complying with the IRS’ 1099 submission requirements (including information and deadlines).

“LLCs and 1099s”

  • This video discusses who must receive W-9s in order for you to collect the information needed to file 1099s.

“IRS 1099 Filing Penalties”

  • This video discusses the dates and penalties for not filing. I’m sharing this here so that you fully understand why it is so crucial to obtain the necessary information in advance – i.e., when onboarding a new contractor (any person or entity you enter into a contract with), that is NOT a corporation or that does not file taxes as a corporation.
  • ALL CORPORATIONS ARE EXEMPT FROM RECEIVING 1099S. THIS MEANS YOU DO NOT NEED TO COLLECT ANY W-9S OR OTHER INFORMATION FOR ANY CORPORATION YOU DO BUSINESS WITH!!

Additional: If you think additional information on 1099s would be helpful for you, please let me know what information you seek! Please share your request in the comment box below.

  • Patricia Boglin

    My alleged lender of 25 years is suddenly demanding I fill out a W9 in order to receive a refund of an overpayment that I made. I get a 1099 every year, so they already have my personal information. How does my filling out a W9 benefit them and/or potentially harm me? pboglin@yahoo.com

    • Hello Patricia,

      Because you shared your email address, I’ll also email you but this is a good question for everyone. Your lender is requesting one either because you never filled one out or because, more likely, they need to ensure that they have your most current information on file. Since it’s been 25 years, you may have moved! Also, they have your information on file as a customer, but they provide evidence to the IRS via W-9s. Therefore, if you don’t fill one out, they’d have to complete one for you and reference other information with your signature. Hence, it’s just easier for them to have you complete a W-9 and keep it on file in that format.

      Your “alleged” lender is just looking out for you both!

      All the best,
      Tiffany

  • Patricia Boglin

    Right. Much different response than I received on Twitter. As I said, I’ve gotten a 1098 EVERY year, and those AND my mortgage statements are mailed to the same address
    (also for past 25 years), so the comment that “I may have moved” doesn’t hold water. I didn’t receive any income from the alleged lender, merely a refund that they were court ordered to return to me because they over charged me.