Obligations to issue 1099s to vendors
Question: Which contractors do I have to issue a 1096/1099 form for to the IRS? I know they are the ones whom I’ve paid more than $600 during the year to,but are there other qualifications to be concerned with?
Answer: Generally you only need to furnish 1099s to independent contractors who are individuals (SSN) or LLCs taxed as either sole proprietors or partnerships (EIN). Currently only corporations are exempt from 1099-MISC requirements.
The preparation task is relatively simple and made easier if you require your contractors to submit Form W-9 (http://www.irs.gov/pub/irs-pdf/fw9.pdf?portlet=3) at the time of payment or with signed contract.
In order to obtain appropriate annual forms I suggest that you go the Internal Revenue Service located in the Federal Building here in Old Town Fort Collins on the corner of Howes and Olive. You will need to ask for the following forms:
- Form 1096 (transmittal)
- Form 1099-MISC (carbonless forms)
You will then send the “red copies” to the Internal Revenue Service (Kansas City, MO 64999) while Copy B is mailed to the recipients.
Make copies for your records.
