Do I need to file a 1099 for a Corporation, LLC?

There is a requirement for businesses and rental property owners to prepare and file Form 1099-MISC for any persons who were paid in excess of $600 and who are not (W-2) employees.  If you choose not to file, there is a risk of the deduction being disallowed in the event of an examination even if it is for an appropriate business purpose and otherwise properly documented.  

A person in the eyes of tax law is The term “person” is an individual, a trust, estate, partnership, association, company or corporation.  That means everybody gets a 1099 unless there is an exception; there is an exception for entities taxed a corporations and LLCs taxed as corporations.  

Real World Tip:  If you are not sure if your contractor's LLC is treated as a corporation, you might not want to waste valuable time getting through gatekeepers with eyebrow raising questions about organizational tax elections.  Our advice is to just ask them for a W-9 and you will see the tax classification. 

As is par for the course, there are exceptions to the exceptions and the biggest one for most people is Attorney's Fees.  SO, If your attorney works for a corporation and she replied to one or two emails and charged you $600, you need to give her a 1099 to protect your deduction which could be the only thing that made you feel better about paying her $600 for two emails. 

What information do I need to file the 1099?  

All the contractor information you need is on form W-9 and all the payment amount information should be in your business books.  It is ordinary for businesses who employ domestic contractors to request a form W-9 from anyone doing contract work for them. 

When do I need to file 1099s?

Form 1099-MISC is sent to the payee (your contractor), the state, and the US Treasury;   Respective deadlines for electronic filing are 1/31, 2/28 (Mass), and 3/31.

Real World Tip: You should wait to file the 1099s with the State and IRS until the respective due dates in case you have to change information on a form (such as a businesses EIN).