As the end of the year is approaching getting a head start on collecting W-9’s is highly recommended. Your bookkeeper will be sending a list of contractors we recommend sending a W-9 and filling an 1099 at the year’s end.
In January, your bookkeeper will process one final run through your books to determine if any additional contractors need to 1099ed.
What the IRS considers a 1099 Contractor:
If you pay independent contractors, you may have to file Form 1099-MISC, Miscellaneous Income, to report payments for services performed for your trade or business. If the following four conditions are met, you must generally report a payment as nonemployee compensation.
- You made the payment to someone who is not your employee;
- You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
- You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
- You made payments to the payee of at least $600 during the year.