A client corp of mine installs among other things water filtration systems. He has one plumbing firm that he pays to do the installations and they send him invoices. Sometimes the corp even pays the invoices lol. Should the corp give the Plumbers a 1099 Misc for what he paid them? If it is relevant I can find out the Plumber's form of business but I do not know it at present.
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Last edited by erchess; 01-28-2008, 11:20 PM. -
Yep
Erchess, the business form is relevant. If the plumber is incorporated, your client escapes the need to issue a 1099. Otherwise he is to receive one if he was paid over $600. -
Just so I am clear
If the plumber is a C or S corp no 1099 Misc. How about if the plumber is an LLC or a Partnership or LLP? would all of those be the same as SP and require a 1099 Misc?Comment
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If your payments fall into these categories - a 1099 Misc is needed "Payments for services performed for a trade or business by people not treated as its employees. Example: fees to subcontractors or directors, and golden parachute payments."
The general instructions for 1099's talk about LLC's. If you are paying a sub-contracting type of vendor, and they are not a corporation (taking into consideration the corporations you still have to report -in the instructions) then your send them a 1099.
Just have them fill out a W-9. Then if they mark the inc. box then you know.JGComment
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1099 Misc forms
I believe the rule has always been if you can establish that the business is a Corp no 1099 Misc form needs to be issued.
Sole Props have been easy to identify, S corps, and C Corps have been somewhat easy to identify, however, now with LLC the question arises.
If the LLC is a sole prop yes issue a 1099 Misc form, if the LLC is identified as a partnership, yes issue a 1099 Misc form. If the LLC is identified as a S corp, no 1099Misc form.
So while the information in black and white leaves something to be desired, when in doubt issue the 1099 Misc form.
I have my trade or business clients send out W-9 forms requesting the information, so that does assist in identifying who we are to issue 1099 Misc Forms to.
SandyComment
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Current W-9 & LLC
Also, the W-9 was changed back in Oct 2007 to provide LLC's a space to indicate their tax category. If the vendor checks "LLC", then he must also give information on whether the business is a Disregarded Entity, a Coporation, or a Partnership. The 1099 instructions don't address this directly, but the inference seems to be that if the LLC is taxed as a corp, then a 1099-Misc is not required."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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W9 forms
mentioned above; don't forget that these are required, regardless of business form.
Reason is to (also) certify that recipient is not subject to backup withholding.
And yes, that even pertains to corporations.
I gave a client a W9 and the recipient refused to fill it out, saying there was nothing
that had to be given either way since "they" were incorporated.
Client is advised to make note of this on the form, something like "refused on this date:
1/15/2008". client is covered in that case. NOT that IRS would ever audit of course,
but still......ChEAr$,
Harlan Lunsford, EA n LAComment
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W-9
So even at this late date I should download W-9 Forms from the IRS website and give them to my client to have the contractors fill out or refuse?Comment
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Yes, I would. And instruct those clients to obtain completed W-9s before they pay in the future if there is any doubt about being a corporation. (One of these years my clients will actually listen to that advice instead of complaining how no one is responding to their request for info in Jan.
)
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