Howdy mbsteelhouse-ga,
A reminder of the "Important Disclaimer: Answers and comments provided on
Google Answers are general information, and are not intended to substitute
for informed professional medical, psychiatric, psychological, tax, legal,
investment, accounting, or other professional advice."
Unless the company in question is a corporation, such as an S-Corporation,
or if you paid them less than $600, then yes, you need to send the company
a 1099-MISC form. Generally a Limited Liability Company (LLC) is not a
corporation, but all you have to do is contact the company and ask them if
they are an S-Corp (S-Corporation), etc. to make sure.
If the company provided you a Social Security number instead of an EIN
(Employer Identification Number) then they would appear to be operating
as a sole proprietor LLC, which is not a corporation.
From the "1099-MISC Reporting Basics" web page on the A/N Group, Inc. Small
Business Taxes & Management web site.
http://www.smbiz.com/sbspec89.html
"You'll need to file a 1099-MISC for each person to whom you have paid:
...
at least $600 in rents, services ...
...
Some payments are not required to be reported, even though they may be
taxable to the recipient or otherwise meet the reporting requirements.
These exceptions include:
Payments to a corporation ..."
If you are unable to ascertain if the company in question is a corporation,
you can just send them a 1099-MISC anyway. From the above web site.
"Corporation or other entity? Merchandise or service? When in doubt, issue
a 1099. That's what many companies do. We don't know if that's right or wrong,
but there are no penalties for issuing a 1099 where one isn't required. Thus,
many businesses issue a 1099 for equipment or other purchases or to a
corporation where they're not sure if the entity is a corporation or a
partnership, LLC, etc."
This Entrepreneur.com, Inc. web site page titled "Preparing Your IRS Forms
1099 and W-2" addresses this point when it comes to contractors, but it looks
like it supports the above statement.
http://www.entrepreneur.com/article/0,4621,306220,00.html
"... the safest bet is to send 1099s to any contractor that is an LLC, a
limited liability partnership (LLP), a business trust or other unincorporated
business entity ..."
If you are working on this year's taxes, keep in mind that you should have
already mailed 1099-MISC forms to companies as of January 31, or there might
be a penalty. If that is the case, it might be in your best interest to
contact the company in question and find out if they are a corporation, as
that might negate the need to send a 1099.
Also make sure the company's Taxpayer Identification Number (TIN), which could
be a Social Security number, EIN, etc., matches their company or individual's
name, as a mistake there could trigger a penalty as well.
If you need any clarification, feel free to ask.
Search strategy:
Google search on: 1099 LLC
://www.google.com/search?q=1099+LLC
Referenced the Internal Revenue Service (IRS) web site.
http://www.irs.gov/
I also am a partner in an LLC and have had to issue 1099-MISC forms.
Looking Forward, denco-ga - Google Answers Researcher |
Clarification of Answer by
denco-ga
on
03 Feb 2005 17:30 PST
Howdy mbsteelhouse-ga,
Just a clarification on the comment below. If the company in question was
being considered a subcontractor or independent contractor, as is often the
case in such situations, such as when the steel being purchased is being cut
or formed, etc. then the company in question would be providing a service,
and not just materials, hence the need for a 1099-MISC.
From the instructions for the 1099-MISC form:
"File Form 1099-MISC, ... for each person to whom you have paid ... at least
$600 in rents, services (including parts and materials) ..."
If indeed you are just buying raw materials, and the company in question did
no services for you, then there should not be a need for a 1099-MISC, just
as you do not need to issue a 1099-MISC for the office supplies that you buy.
Just be aware that if you were supposed to issue a 1099-MISC to a company and
did not do so, then there could be IRS penalties to pay. If you do issue a
1099-MISC to a company that you didn't need to, no harm, no foul.
Looking Forward, denco-ga - Google Answers Researcher
|
