Use Form W-9 to obtain the name, mailing address and tax ID number (TIN) for your vendors. If you need a copy of Form W-9, you may download it from the IRS website www.irs.gov.
You may make copies of this form, it is not submitted to the IRS. It is always a good idea to have anyone you think you may need to issue a 1099-MISC fill out Form W-9 before you pay them. It is sometimes difficult or impossible to track down a subcontractor or other vendor in January of the following year.
A note regarding vendor name and tax ID (TIN) number. If the TIN is a Social Security Number (format is 111-11-1111) then you must report the person's name (whose Social Security Number it is) on Form 1099-MISC. If the TIN is an Employer ID number (EIN) (format is 11-1111111) then report the company name only on Form 1099-MISC.
IRS penalties for failure to file.
The IRS is cracking down on businesses who fail to file Form 1099-MISC.
The penalty for failure to file or filing with incomplete or inaccurate information is $50 per form up to a maximum of $250,000.
The penalty for intentional disregard of the filing requirements is $100 per form with no maximum.
Who gets Form 1099-MISC? This information return is issued to your vendors, subcontractors, consultants and landlords (in QuickBooks these people will be in your Vendor list).
The 3 basic criteria for issuing Form 1099-MISC are:
Payment is for services (not for product, supplies or materials) or rent
Payment is more than $600 for the calendar year
Recipient is not a corporation * - the recipient can be an individual, sole proprietor, partnership, LLP (Limited Liability Partnership or LLC (Limited Liability Company). Note: an LLC is not a corporation. Corporations are required to have "Inc." or "Corp." or "Corporation" in their name.
* special rule for attorneys - attorneys are issued Form 1099-MISC even if they are a corporation.
QuickBooks ProAdvisor® Program Member
As a QuickBooks ProAdvisor, we are provided with the software, support, information and resources necessary to give the outstanding service and support to our QuickBooks and small business clients.
