Did You Collect the Needed W-9s?

Article Highlights:

• The IRS Form W-9 is used to obtain independent contractors’ tax ID numbers.
  
• Tax ID numbers are required when filing 1099s.
  
• 1099-MISCs must be issued to independent contractors that are paid $600 or more during the year for performing services for a trade or business.

If you used independent contractors to perform services for your business or trade, and you paid them $600 or more for the year, you must issue them a Form 1099-MISC to get the deduction for their labor and expenses and avoid potential penalties. (This requirement generally does not apply to payments made to a corporation. However, the corporation exception does not apply to payments made for attorney fees and for certain payments for medical or health care services.)

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