You may be required to send Form 1099’s to businesses and individuals you made payments to during the year. Here’s a partial list of payments that require a Form 1099:
- Payments for services performed by independent contractors
- Rent paid
- Interest paid on a business debt
- Dividends paid to a company shareholder
For more information on whether or not you may be required to make a payment, see the IRS website. Otherwise, give us a call at 616.393.0398 and we would be happy to help you. Remember you need to send these forms out to the recipient by February 1, 2016 for the preceding year.
Additionally, make sure to have each vendor complete a Form W-9. This will make preparing Form 1099’s much easier!
I found this smallbiztrends.com article interesting. It states, “You are not required to send a 1099 form to independent contractors such as freelancers, or to other unincorporated businesses such as LLCs, if you paid them via PayPal or credit card.” I’ll bet a lot of businesses aren’t aware of that.