Issuing 1099 From LLC to Individual

[twins0203]

Are there any certain requirements to issue an individual a 1099 from a LLC, other than SSN? Like a form that they need to fill out or anything?

I'm needing to find out before I pay someone a decent amount. They have earned money from a company through my company, so I'll be paying them exactly what they've earned, but don't want to get stuck in the middle owing taxes on their part.

[MonkeyMama]

Re: Issuing 1099 From LLC to Individual

I don't think they have to fill out a form, but you can request that they fill out a W-9 (request for Tax ID#). I am not sure if htis is mandatory, but a good idea.

You will not be stuck owing taxes on their part.

I am a CPA and we make clear to our clients that if you pay someone more than $600 in a calendar year you need to discuss 1099s before paying said person. Too often the recipient balks, the client decides not to report it, and we say uh uh no way, this is your ass on the line of a few hundred dollars. When it is discussed beforehand you avoid a lot of conflict down the road. FYI. We say never hire a subcontractor without getting a W-9 - then if they fill it out you know they are cooperative. If they balk, don't hire them.

If you try to issue a 1099 but they will not cooperate, i.e. will not provide you with their tax ID, then down the road you need to do withholding when you pay them again. It has never come to that in my experience. Once the issue of 1099 comes up either you decide to be honest or dishonest, and if you don't agree the relationship between both parties ends pretty fast. If they are dishonest in the manner they certainly will not want to do work for you knowing money will be withheld for taxes.

The only trouble you will face is if you don't issue a 1099 when you should.

Anyway, good luck.

[twins0203]

Re: Issuing 1099 From LLC to Individual

Thank you MonkeyMama!

Just what I wanted to hear