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10 Best Practices for 1099 Compliance in 2021
10 Best Practices for W-9/1099 Compliance in 2021 Organizations are required to report certain “reportable” payments made in the course of their trade or business to the IRS. This process is known as “Information reporting”. There are over 30 information tax returns that are required to be submitted to the IRS. This process allows the IRS to cross-check the income reported from these organizations with the income reported on an individual and entity’s tax return. This in turn helps increase the likelihood
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- Completing W-9s (11)
- Corporation (4)
- Featured (6)
- Form 1099 (17)
- Individual/Sole Proprietor (4)
- LLC (5)
- Requesting W-9s (13)
Am I required to complete Form W-9?
Why is my customer asking for a W-9 form? Companies that make payments in the normal course of their business are required to report certain
IRS proposes changes to electronic reporting requirements
The IRS has proposed regulations amending the rules for determining whether information returns must be filed electronically. The proposed regulations would require that all information
What is the purpose of Form W-9?
Form W-9 is an IRS created form used by an individual or an entity, like a company, to request the taxpayer identification number (TIN) and other information from parties they
Do I have to request a W-9 from a corporation?
Summary The Internal Revenue Code (IRC) states that payments to corporations generally do not have to be reported on an information return like Form 1099-MISC.
What is the difference between an individual and a sole proprietor?
Definition of a sole proprietor The IRS defines a sole proprietor as “someone who owns an unincorporated business by himself or herself.” It is the
What names should LLCs use when completing Form W-9
In the instructions section of IRS Form W-9 there is a “Specific Instructions” paragraph that provides guidance to LLCs with more than one member. Line 1 is
What tax classification should an LLC select?
LLC’s fall into 4 general categories for W-9 purposes. Single member LLC – In this case the LLC is considered a disregarded entity and one should look
IRS differentiation between an employee and an independent contractor
The determination can be complex and depends on the facts and circumstances of each case. The determination is based on whether the person for whom
What is the difference between a Form W-2 and a Form 1099-MISC?
Although both of these forms are called information returns, they serve different functions. Employers use Form W-2, Wage and Tax Statement, to: Report wages, tips,