is a small business owner required to pay a "fine" if he pays a worker but does not 1099 a worker?

Question

not all people want to give a social security number to me.

what if people work for themselves and want to be responsible for their own taxes?

Answer 1

Yes, you can be fined $50 for each 1099 that is not filed with the IRS by the due date. However, if you follow the suggested procedures for gathering this information, you will not be fined.

A 1099 is only given to independent contractors, not employees. Employees should receive a W-2, showing all of their wages and deductions.

You cannot just decide to call an employee an independent contractor to avoid paying the payroll taxes. If you control the worker's time, methods, tools, workplace, etc., that worker is an employee and you should withhold and pay taxes on their wages.

If you truly have an independent contractor, then you should collect form W-9 from them before you make any payment to them. If they don't complete the W-9, with their SSN or other tax id #, you don't pay them. That works very well and keeps you from getting fined by the IRS.

For more info, visit the IRS website: www.irs.gov.

Answer 2

I own a small business and my people work as independent workers so their whole tax thing is their responsibility. They don't work FOR me but rather they work for themselves and pay me rent like a beautician does that way I can't get in trouble if they don't pay their taxes. They all signed a contract before they started working in my business.

Answer 3

1099 is a tax form for a private contractor. You should have had this form filled out before allowing them to do work for you.