10 Dec Collect W-9s From Vendors Now to Issue 1099s in January
Posted at 18:31h in Tax Preperation 0 Comments
As we get closer to year-end and the beginning of the new year, businesses that pay vendors for labor or services should ensure they have Forms W-9’s on-file now so that Form 1099 can be issued in January.
- Form W-9 is a request for each vendor’s taxpayer identification number and certification, used to verify that you are working with legitimate businesses or individuals that are paying their taxes.
- As a business owner, by February 1st, you are required to issue Form 1099 to any unincorporated vendor paid $600 or more by your business for services or rent. Also, 1099s must be issued to all law firms, whether incorporated or not.
- The information on Form W-9 is needed to complete and issue Form 1099.
As January 31st and the deadline to issue 1099 approaches, it could become more difficult to receive Form W-9 from your vendors at a busy time as opposed to before year-end or while you are still paying for their services.
- Keep Form W-9 with your vendor records as proof that you sent information to the IRS provided to you by the vendor.
- W-9s are still needed from a corporation, to prove the vendor is a corporation and doesn’t require a 1099.
- Having vendors fill out W-9s up front can help avoid difficulties in receiving them later.
- Businesses are subject to penalties for failure to file or for filing the forms with inaccurate information.
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