Can I pay a commission employee $599 this year and not worry about sending him/her a 1099 tax form next January?
2007-03-03 11:43:31 · 3 answers · asked by CALIFORNIA GOLD 3 in Business & Finance ➔ Taxes ➔ United States
Commissioned *employees* need W-2s no matter what amount you pay them. If you really meant a commissioned *independent contractor* than no. Not until you pay them non-employee compensation of $600 or more.
However, since you are confusing the contractor vs. employee issue in your question - I seriously recommend you seek the advice of a CPA (or the IRS directly through Form SS-8). You can be subject to back taxes, fines and other penalties if you misclassified an employee.
2007-03-03 12:13:59 · answer #1 · answered by forsythia75 2 · 0⤊ 0⤋
IF the person in question is not an employee but an independent contractor, you only need to send a 1099 for $600 or more. The IRS is cracking down on misclassifications, so be sure you are correct that he is not an employee. See the IRS guidelines for the differences if you are not sure.
2007-03-03 19:49:05 · answer #2 · answered by Brian G 6 · 0⤊ 0⤋
BrianG is right on the money (no pun intended). At $600 and over, the IRS requires that you issue a 1099. Just in case, though, make sure the contractor has completed Form W-9 so you have all pertinent information. And if this individual is truly a subcontractor, make sure that he/she has liability insurance because a sub isn't covered under your umbrella policy.
2007-03-03 20:12:24 · answer #3 · answered by SuzeY 5 · 0⤊ 0⤋