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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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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,
What is a disregarded entity?
Here is the IRS definition of a disregarded entity from the “Specific Instructions” section of Form W-9: Disregarded entity. For U.S. federal tax purposes, an
Are electronic W-9s legal?
Yes, electronic W-9s are legal as long as IRS guidelines are followed. Here is what the IRS says about the electronic submission of Forms W-9
Are payments to corporations reportable on a 1099-MISC form?
The Short Answer Most payments to corporations are NOT required to be reported on Form 1099-MISC. Corporations include both S and C corporations as well