How much can I pay them before I have to get their W-9 info. Is this per person or the total amount for everyone. Say its $500.00. If I paid subcontractor $550.00 and another one $100.00 am I over my amount total $150.00 or just for $50.00 for one subcontractor and under the amount for the other. So the one that is under I don't need his w-9 info yet.
2007-03-19 14:21:57 · 3 answers · asked by givetolive2007 1 in Business & Finance ➔ Taxes ➔ United States
if you do not 1099 them then you get to show that as income.
W-9 them all be fore they start work.
2007-03-19 14:27:00 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Actually, you need to get a contractor's W-9 info before you issue the first check to them. If the person refuses to give you his FEIN or SSN, you're required to take "backup withholding" at 20% of the gross pay. Also, you should be verifying that these subcontractors have their own insurance in case they get hurt on a job or make a mistake. Otherwise, you'll be the one considered negligent for not verifying the contractor.
That said, if any one contractor is paid less than $600, a 1099-MISC doesn't need to be issued. So, if you had 3 contractors who each received $250 from your business, you wouldn't be required to send a 1099-MISC to any of them.
Careful about who you call a "contractor"-the IRS is climbing all over this one lately, and the penalties can be steep if someone is called a "contractor" who actually is an "employee".
2007-03-19 15:34:59 · answer #2 · answered by SuzeY 5 · 0⤊ 0⤋
You need to get their SSN or EIN before you make the first payment. I've made it a mandatory requirement -- no SSN or EIN, no pay! I don't want to deal with the hassle of backup withholding so I just won't do business without the SSN or EIN.
You need to cut a Form 1099 for each one you paid $600 or more in any tax year. You may cut a Form 1099 for lesser amounts. I don't do very many so I 1099 all payments for services.
2007-03-19 15:40:21 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋