View Full Version : W-9 quwstion

01-13-2017, 08:16 PM
I have a small business. First time filing taxes with it. I buy product from people from ads posted on Facebook pages ,etc. I then will sell these products to a wholesaler. I was told that I have to give my customers a W-9 if I have given them more than $600 in the last year.Is that right?

02-01-2017, 03:32 PM
You are required to send Form 1099 to vendors or sub-contractors during the normal course of business you paid more than $600, and that includes any individual, partnership, Limited Liability Company (LLC), Limited Partnership (LP), or Estate.

The exemption list is fairly lengthy, but the most common is that you don’t need to send a 1099 to:
•Vendors operating as S or C-Corporations (you’ll find their status out when you get a W-9). Even if your lawyer is ‘incorporated’, you are still required to send them a Form 1099 if you paid them more than $600.
•Sellers of merchandise, freight, storage or similar items.
•Payments of rent to or through real estate agents (typically property managers). However, keep in mind you need to issue a 1099 to a landlord you are paying rent, unless they meet another exception.

Don’t worry about credit card payments and Paypal. The IRS allows taxpayers to exclude from Form 1099-MISC any payments you made by credit card, debit card, gift card, or third-party payment network such as PayPal. (These payments are being reported by the card issuers and third-party payment networks on Form 1099-K.)

I usually send a form W-9 to any vendor after receiving their first invoice. Using this as a normal business practice will give you the vendor’s mailing information, Tax ID number, and also require them to indicate if they are a corporation or not. That will save you time come year-end.