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1099s, the bane of the business owner’s existence in the accounting

  • Who do you need to give a 1099 to?
  • how do you provide the subcontractor a 1099
  • Recommendation to all of the business owners, which will make 1099s much easier, is to ensure that before you pay anyone, do not write a check to anyone without having a W-9 for that person on file

Hello everyone, this is Shauna the Tax Goddess. Can you tell, I’m already getting into the mood for Christmas. I absolutely love Christmas. I’m so excited and I can’t wait for it. Just getting a little too excited about the thing, but today we’re here to talk about 1099s, the bane of the business owner’s existence in the accounting. Obtaining, what kind of records do you need, who do you need to file 1099s for. These are all very good questions, and really they all relate to who do you need to pay and who do you need to track and of which dollar amounts.

We’re going to start at the beginning today, who do you need to give a 1099 to in the first place. 1099s need to be prepared for anyone that you pay more than $600 to. When I say anyone, typically I’m talking about individual. I’m not talking about corporations. For example, if you’re in the construction industry, you do not need to give 1099 to Home Depot, or Target, or Lowes or any of those kinds of companies. But if you have a sub-contractor that is working for you that is an individual company, I’m sorry, an individual person and not a company, then you’re going to want to provide them a 1099.

Now, of course the question becomes, “Well, how do I go about providing them a 1099?” The 1099 itself is a very simple form. Often you can get those either from the IRS office or from Office Max or Staples, you know any of those office type companies. The 1099 form, all you really need is the name, the address and the social security number of the person, or the EIN number of the company depending that you are going to provide the 1099 to. Now the most important part for you as the business owner is to make sure that you actually get those 1099s out. The IRS does now enforce a $100 penalty per 1099 that does not go out on time, which would be by January 31st of each year to the people that are required to have 1099s.

If you have any questions or want more details, we’re going to write more details below in our blog post as well. Or you can always reach out to us at We’d be happy to go over those details with you. The last piece that you’re definitely going to want, and this I recommend for all of our business owners, it will make 1099s much easier, is to ensure that before you pay anyone, do not write a check to anyone without having a W-9 for that person on file. Very very very important that you have a W-9 for the person you’re paying on file. Now, you may have some people who refused to provide you with a W-9. It’s a little iffy. People who refuse to give you a W-9, you may want to at least consider, at least ponder not working with those people.

Now, not to say that they’re not above board. Of course everybody has their thing, but you, as the business owner, are the one on the line with the IRS if the IRS comes in to ask you about your 1099s. They don’t really care if somebody refused to give you the W-9. The IRS will be asking you. You are the business owner. It is your responsibility. The IRS does place a pretty heavy burden on the business owner, which is why you need a good team behind you. A good bookkeeper, a good CPA and of course a good tax strategist to ensure you’re doing everything right the way it needs to be done.

So, I want to say thank you so much to everybody who joined us on the call today. I can’t wait for Christmas. Yay, I’m so excited! But anyway, looking forward to speaking with you guys over the next couple of weeks. We’re going to be sharing a ton of tips and tricks for business owners. If you’re a business owner, make sure you’re checking in. All right, thanks much guys. Have a great day and remember if you need help, reach out to your Tax Goddess.

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