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WARNING: Here’s You Need To Know About forms W9 and 1099s

Updated: Aug 20, 2020

What is Form W-9?

A W-9 is sent by you to a contractor for services that are going to be provided to collect their contact information and tax number. According to the rules, you should obtain a completed form W-9 before making any payments to the contractor. It’s your duty, as someone who is contracting work, to send the contractor the Form W-9 before services start.

The contractor’s job is to fill it out with the tax information for their business or if doing business as an individual with their personal tax information.

Tax deadline for Form W-9

There is no tax deadline for Form W-9. Technically, you are required to have a contractor fill out a Form W-9 before you pay them. 

It is very important that the vendor/individual provides all the information listed below: 

  • Vendor Name

  • DBA (Doing Business As) name, if applicable

  • Taxpayer Identification Number (TIN)

  • Vendor Address (Order from & Remit to Address, if different) Telephone Number

  • Fax Number

  • Email Address

What is Form 1099?

For each contractor that you pay more than $600 during the tax year, you are required to send the contractor a Form 1099. This form lists what you’ve paid them over the course of the prior tax year. Typically, a contractor will get a Form 1099 from a client in January (the beginning of tax season).

You also send a copy to the IRS. The IRS will match the forms 1099s a contractor has received with the information they included in their tax return. They want to be certain contractors pay taxes on everything they’ve earned.

Tax deadline for Form 1099

You are required to send contractors the Form 1099 by January 31st. That due date is extended to February 28th if you’ve entered payments in Box 8 or 14.

IMPORTANT! - If you pay your contractors via Credit Card then you don’t need to issue Form 1099. Their Merchant Account will issue them a Form 1099-K to report all payments received by Credit Card. The same happens if they receive payments using a PayPal Account but only if you don’t use the “Friends and Family” option. 

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Need help or extra assistance about W9’s from the vendor and 1099’s filing process? #ContactUs at admin@mybooksntaxes.com or by phone (510) 992-3499

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