Did you hire a vendor or contractor to perform a service for you?
This could include hiring a lawyer, accountant, cleaner, plumber, landscaper or landlord, where you did not get a tangible item.
If you paid them $600 or more during the calendar year, you NEED to send them a 1099
What is a 1099?
A 1099 is a tax document sent by you to a vendor/contractor and the IRS telling them how much you paid.
It is like a W-2 for a person that is not an employee.
What is the difference between a 1099 and a 1096?
The 1099 is the Form sent to the Contractor by Jan 31st.
The 1096 is a summary Form sent to the IRS, along with copies of the 1099s. It is due to the IRS by Jan 31st but you can extend to Feb 28th.
Things to Know:
No Corps: Corporations do not get 1099s. LLCs and sole proprietors do.
Independent Contractor: a person or entity contracted to perform work or provide services to another entity as a non-employee.
Inventory: 1099s are not needed for inventory purchases.
TIPS:
When in doubt… send one out!
If you think someone needs a 1099, odds are they do.
If you are unsure, it is best to send one as precaution rather than having to amend a 1096 and face penalties.
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