I am using the tiny commercial operation as well as we wish to sinecure an independant executive to do the little technical essay for the website. Are there any IRS forms which we need to have to executive fill out before to commencement work upon my website? The work will be successive for we estimate 1 year.
Also, how do we inform to the IRS which we paid this executive as well as when do we send which form in?
Thanks for the help!
The work will be finished off-site, not have regulated hours, as well as will expected be about 10-20 hours the month.
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Comments: 6 comments
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TaxMan
December 16th, 2009 at 8:47 am
At the end of the year, if you paid him/her $600 or more, then you need to fill out and give him/her and the IRS a 1099-MISC form. These are not too difficult to fill out, and you need not concern yourself with withholdings or FUTA or anything of the sort since they are a contractor and not an employee. On the 1099-MISC form, you need to fill in their SSN or EIN (whichever they wish to provide). Anytime you need an identification number to file a form with the IRS, you also need them to fill out and submit to you a completed W-9. You really don’t NEED the W-9 before they start working for you, but I’d get them to fill it out ASAP. Remember, if you pay them less than $600, then you don’t need to send a 1099-MISC nor get a W-9. Just because you pay them less than $600 doesn’t mean they don’t have to claim the income, nor does it mean you can’t write off the expense. It just means you don’t need the W-9 / 1099-MISC forms filled out.
alawton5
December 16th, 2009 at 8:47 am
might be a 1099
waggy_33
December 16th, 2009 at 8:47 am
You will need a W-9 form to be filled out by him before work starts. The in January you will complete a 1099 MISC form reporting how much you paid him. This form is filed withe the IRS using a 1096 form. You need to send him a copy of the 1099 in January.
irongrama
December 16th, 2009 at 8:47 am
If he is truly an independent contractor he doesn’t have to fill out any forms for you. You would file a form 1099 showing his total income at the end of the year. There are requirements to be met for him to be considered an independent contractor rather than an employee though. He should be a person who does the same kind of work for more than one person, in other words be in this business on his own. He should be independent, set his own hours and place of work etc. There are other requirements and if your situation does not meet them he should be treated as an employee.
tma
December 16th, 2009 at 8:47 am
the TaxMan is correct. also, if the independent contractor is incorporated, you do not need to do anything. you are not required to provide 1099s for corporations.
all your payments should be by check, and not cash. many independent contractors want to get paid in cash so as not to report the income.
skip
December 16th, 2009 at 8:47 am
If he is going to be working for you for a year and if it is full-time (you didn’t say whether or not it is) then he is likely to be an employee. Only one other answer has adequately addressed that so far and you need to nail that issue down before you do anything else.
If he is an employee you will have to file quarterly returns to the IRS, as well as returns to the state (the frequency depends on the state). even if you file quarterly, you may have to pay tax more frequently. You will also have to consider unemployment insurance issues.
If I were in your shoes, I would be seeking my accountant’s advice. The practicalities of the situation must be fully considered and I suggest that this is not the best forum to do it.
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