1099 Basics for Small Businesses: Who Needs One & How to Prepare

[@tupacandp]

You are bringing the HEAT these last couple of uploads. Right on time! Thank you

[@ClaraCFO]

Trying my best! Thanks for watching!

[@BardenAccounting]

thorough as always. I have been looking for a video of this quality to share with clients so that they can understand why I am hasseling them about getting these W9s for contractors. Thank you again. Good luck on getting the 100K+ followers. You deserve it!

[@MonnaQ]

Soooo helpful. Thank you Hannah!

[@ClaraCFO]

Thanks for watching!

[@raviy150]

Looks like you got there🎉

[@ClaraCFO]

Yes! Recorded and edited before the 100k hit over the weekend! So excited to have made it!! Onward to reach more business owners!!!

[@arboriststudyguide]

Haven't even watched it yet but very timely, I've been wondering. Commenting for the algorithm!

[@ClaraCFO]

Thank you!

[@maryhegrat6001]

I agree with your opinions on 1099s but I also still love doing them :D

[@GregoryIncollingo]

Great video! Thanks again!

[@Mb-e4o]

Great video, thank you! question for Venmo- since 2024 is a transition year where Venmo only issues the 1099-K for contractors who made over $5000 on the platform, does a business who paid a contractor $1000 through Venmo need to issue a 1099 to their contractor? since it is over $600 but under $5000, so Venmo won’t be reporting it?

[@B-Shah]

Hi Clara, QQ- Would a vendor (regular business services like IT, Marketing) that has identified as LLC-P (Partnership) need to be given a 1099? You talked about C Corp and S Corp but not about LLC-P- Thank you for the info!

[@bobbymiller2605]

I have the same question.

[@bobbymiller2605]

just found this - When a single-member LLC is taxed as a Sole Proprietorship or a multi-member LLC is taxed as a Partnership, any business that pays the LLC $600 or more for services in the year must send it a 1099-NEC (Nonemployee Compensation) form.

[@B-Shah]

@@bobbymiller2605 thanks! So I will include LLC-Partnerships as 1099 vendors. How about accounting firms (big 4) that are listed as partnerships on their W9? Do we issue 1099 for fees paid to them for services? Basic research online shows that we should issue one for accounting firms that are partnerships but seems weird to issue one to the big 4.

[@nguye1971]

Thanks Hannah - what about the payments for services to a dba? @11:07 agreed that lawyers can’t be trusted:))

[@StephaniaCubillos]

Hi Hannah! Very Helpful, but what about and LLC partnership but it was a sponsorship fee over USD 600, is it considered as a service to file a 1099

[@agnesviacrucis2257]

Thanks for this info Clara. What about the owner of the business and is receiving sales commissions under the same entity. How should this be recorded in the books? And, is this a 1099able situation?

[@ClaraCFO]

The owner is receiving sales commissions of making sales in their own company?

[@agnesviacrucis2257]

@ yes and from other two companies.

[@ClaraCFO]

@@agnesviacrucis2257 Hmm, this is confusing to me. If owners are getting commissions payments, they should either be paid out as W2 wages (if the owner is an employee) or the payments should be recorded as owner's draws. This sounds like it might be done incorrectly and I'd consult your tax professional to make sure it's set up properly. you can't pay the owner as a "vendor" and that's kinda what this sounds like.

[@theonlinebizwhiz]

So if my s-corp does work for a business do we pay taxes on the earnings twice? Once because the income from the job is part of our gross income AND again when we get a 1099 from them. I’ve never been able to figure this. I hope my question makes sense.

[@morganbaker5875]

If an LLC is customizing products for us, does that qualify as a service?

[@ClaraCFO]

Sounds like it! I don’t know the details, but if labor is applied to products, that seems like it might qualify

[@sterlingbernard6704]

Do I need to issue 1099's for goods purchased to any vendors if I am an LLC?

[@ClaraCFO]

No, it’s more about services rendered (for the 1099 NEC). Not goods purchased.

[@TechnobunnY]

Hi, Thanks for the video do I need to issue 1099 to a professional who works for me remotely from Philippines.

[@ClaraCFO]

No, this is for US based serve providers only.

[@TechnobunnY]

@ClaraCFO thanks for help

[@anastasia-r5m3f]

Hi, I am considered a marketplace facilitator- we sell on behalf of artists, do you have info on 1099s for products you’re selling on behalf of an artist?

[@lillybell6024]

Do individuals that do not have a business, need to send 1099s to attorneys that they paid?

[@ClaraCFO]

no! this is only for businesses who are taking those expenses on their returns

[@lillybell6024]

@ClaraCFO thank you

[@JoeDeWitt71]

Hi Hannah! Hey, I use Melio Payment to pay my Vendors....wouldn't Melio be considered a Third Party Payer like PayPal? Do I need to send 1099s in this case? (for anyone over $600)

[@ClaraCFO]

No, Melio is not a third party payer…if you paid vendors through ACH or checks then you need to treat those vendors like you did the payments yourself. I know Melio has a report you can run to help you issue 1099s!

[@JoeDeWitt71]

@@ClaraCFO Ah good to know. Thank you so much, Hannah! Okay, I better get on it. lol!