Forums: Discussions for entrepreneurs and small business.

I have a 1099-MISC question to ask.

We paid two LLC companies $5,000 and $3,000 respectively for services in 2006.  We cancelled our contracts with both of the companies due to poor service.  I`ve asked several times for each to submit a W-9 to me, but neither has.  Now the Jan. 31 deadline has passed and I need to know how I report these payments to the IRS without either companies tax ID info.

I understand that I do no have to sumibt 1099 info to corporations, but these are both LLCs. 

Anyone ever run into this and know what I can do?

Thanks,

Tammy

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Tammy Graham, Founder & CEO, True Genius Apparel Company: fitting your personality; www.mytruegenius.com. "You must be the change you wish to see in the world."

I`m confused what you paid them for. Was it a salary or contract work?

I`m just asking because I pay out money for a lot of services throughout the year that I don`t file 1099s for.

And I provide services for many businesses that don`t provide 1099s for me.

The only time I`m in a 1099 situation is when I am providing a long-term service as a independent contractor.

[edited] I love your logo btw. And the shirts are cute!


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That PHP Girl
Small Business Essentials
Latest Post on SUN: New Facebook Pages - First Impressions

The best way to get a W-9 filled out in a timely manner is to have them fill it out BEFORE they get their first payment. 

Vendors are usually happy to do it when they get your money, not when you terminate them.

I provide W-9 services to over 1/2 my clients so they don`t have to track everything down themselves or waste alot of phone time leaving messages.

When I have a situation where someone won`t provide an FEIN or SSN to me via a W-9, I go ahead and do the 1099 and put REQUESTED in the box for their ID number.

It won`t take long for the IRS to send them a letter.

BTW ~ you should issue a 1099 to certain vendors you pay over $600 in any calendar year.

Look at your vendor invoices ~ usually near the remittance address for large companies and health care providers ~ the FEIN is normally printed on them.

 

 

I guess in my line of business, I don`t get any "vendor invoices".

I mean, what kind of "certain vendors" are you talking about?

I can`t see, according to the IRS`s site, why you would be giving all your vendors 1099s.

The only 1099s I issue are for my ICs.


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That PHP Girl
Small Business Essentials
Latest Post on SUN: New Facebook Pages - First Impressions

Yes that was part of the IRS publication I already linked to.

And I don`t use any of those things.

I was just wondering because you made it sound like 1099 to "vendors" was pretty common. And none of my clients 1099 me. I assume they just pay me and list it on their tax returns. So maybe it`s just my type of business.


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That PHP Girl
Small Business Essentials
Latest Post on SUN: New Facebook Pages - First Impressions

Not everyone bothers to issue 1099`s, even when they should.

I`ve been witness to a couple of audits by the IRS where 1099`s were NOT issued because the recipients were paid cash and the government didn`t allow the deduction causing additional tax liabilities and penalties to the business owner.

For you, it`s the best way to prove what you`ve paid out an for small businesses who receive them it`s a good way to keep track of who paid them what when they don`t keep good records.

The government doesn`t involve itself overly much where 1099 forms are concerned and I`m sure it has to do with the fact that there are too many small business and entrepreneurs. 

It could become a huge "cash cow" for the IRS if they should ever decide to pursue it later, tho.

It`s a way of safeguarding your business and reducing your chances or additional taxes & penalties.

Compliance is the best way to CYA, so to speak.

 

In the original situation, it sounds like the $5K and $3K were fees for services, rather than nonemployee compensation. Therefore, you would be able to deduct that money as standard business expenses. I don`t think a 1099 is needed.

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Lauren Milligan,
Career Advancement Specialist
www.ResuMAYDAY.com
www.blogResuMAYDAY.blogspot.com
www.mydreambiz.net (the radio show!)

I have a question about this topic.

I run a small business selling a construction product to larger general contractors. the product that i sell is manufactured by another company. so in other words i buy the product from the manufacture and resell it to the general contractors. The Manufacture is an L.L.C company,  so do i have to issue them a 1099? if i do, what line on the 1099 does it go on, 9 or 7?

thanks..