1099S: How to Avoid an Audit

Processing 1099’s can be confusing and frustrating. Here are some facts you need to know!
General Rule: If you pay someone more than $600 in a calendar year for services, not material/product, then you are required to provide a 1099 showing the amount you paid. One tip is to collect a W-9 at the time of payment so you know if the business is a sole proprietorship, LLC or Corporation. If it is a corporation, then no 1099 is required. The 1099 is due January 31st and the required 1096 is due February 28th.
Addressing the 1099: If the person you paid uses their Social Security number as a tax ID number (which I don’t recommend), then the person’s full name must be on the first line of the 1099. If you list the business name by mistake, then you will receive a letter from the IRS saying that the …