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When does a 1099 Misc need to be issued?

The IRS publications say that...

The IRS publications say that I have to file a 1099 Misc for independent contractions. But I've also seen where it is not required for corporations. Does a 1099 Misc have to be issues to a service provider that is a corporation? If not, are LLC's and PC's considered corporations for purposed of 1099 reporting?

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Answered in 8 minutes by:
1/5/2010
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Welcome to JustAnswer,

Anyone who performs work for your company should fill out a W-0 form. On that form they will indicate if they are formally established as a corporation. If they are a corporation, then you are not required to send them a 1099 form.

But, it is not up to you to determine their business status. You need to go by the information they have provided for you on the W-9 form.

I hope this has been helpful.

Thank you.

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Customer reply replied 8 years ago

Please tell me if an LLC and/or a PC is deemed a "Corporation" for purposes of 1099 Misc filing requirements.

No, they are not necessarily considered corporations.

LLC actually stands for Limited Liability Company --- not Limited Liability Corporation. An LLC can be either a single member company which is disregarded as a separate tax entity, or it can be a partnership, or it can be a corporation. That is why you have to have them fill out the W-9 form to clarify their status.

On the W-9 form, if they check that their company is an LLC, then right next to that line they are further asked to clarify if they are either

A) A disregarded tax entity

B) A corporation

C) A partnership

If they check any box other than b, then you send them a 1099 form.

The designation of PC stands for Professional Corporation, and generally firms that have that designation as part of their name, are in fact registered as corporations. But again, the requirement is that you have them fill out the W-9 to have them actually indicate their tax status. Someone could be using the designation of PC when it really does not apply to them.

A W-9 must be filled out by anyone who provides services to your company. Anyone who does not check the box to indicate they are anything but a corporation must be sent a 1099 form if you paid them more than $600 for the year.

Thank you.

Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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