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Quick 1099 question for a driveway

Discussion in 'Business Fundamentals' started by daninline, Dec 3, 2006.

  1. daninline

    daninline Senior Member
    Messages: 430

    I have a question I have a customer from last year calling me to plow his driveway but.
    Now he rents the house out and wants me to give him my SS# so he can 1009 me at the end of the year.
    Now I do pay my taxes for my biz but I don't think I want to give this person my SS#

    this is only about a $400 a year account.

    I'm thinking of getting a LLC to cover my a$$ and then I would think it would be easier.

    Now I just need to find info on a LLC.

  2. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    He will still need you to fill out the 1099 it is for his taxes and for yours.

    It does not matter if you are a LLC or not.
  3. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    Dont fall for it. Tell him no way.

    Tell him to make the check out to your business name and you willo handle filing it as income.

    Ive never heard something so rediculous.

    You are a contractor. Not an Independent contractor.
  4. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    :dizzy: :rolleyes:

    Daninline"Now he rents the house out "
    That makes him a landlord he has a small business.
    He needs the Info for his taxes.
    If you LLM knew any thing about business you would not have said what you did.

    What do you mean by this statement? LLM"You are a contractor. Not an Independent contractor."

    What difference would the name on the check make?
    LLM, what is a 1099?
    Last edited: Dec 3, 2006
  5. lawnMaster5000

    lawnMaster5000 Senior Member
    Messages: 105

    You are correct you do not need to give him your SS#. However you do need to give him your EIN.

    I wasn't able to find the specific explanation on the IRS site but the 1099 is basically a form to show where a company spent its money during a given year.

    They are very common and no big deal.

    Search on here, I know it has been discussed several times before.

    Search Lawnsite.com it has been discussed several times on there. I dont know if it has been discussed on here or not. I would assume so.
    Last edited: Dec 4, 2006
  6. flykelley

    flykelley 2000 Club Member
    Messages: 2,127

    [If it is under $ 700.00 a year he doesn't need to give you a 1099. iF it is over just give him your EIN. I would never give him my SS number, thats why you have a EIN.

    Regards Mike
  7. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    Where are you guys getting this info.

    He pays you with a check. You give him a receipt. He claims the deduction of the expense on his taxes, and you claim the income on your taxes.

    You want me to believe every time you guys do jobs or earn more than 700 a year from a client you have to exchange 1099's?
  8. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Before I organized my LLC, I gave out my SS for a 1099 twice to the business accountant.
    May be I've been lucky.... I still have them for customers.
  9. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    LLM wrap your brain around this one!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Examples of uses of Form 1099
    A notable use of Form 1099 is to report amounts paid to independent contractors (in IRS terminology, such payments are nonemployee compensation). The ubiquity of the form has also led to use of the phrase "1099" to refer to contractors themselves. U.S. tax law requires businesses to submit a Form 1099 for every contractor paid more than $600 for services during a year. This requirement usually does not apply to corporations receiving payments.

    Many businesses and organizations must file thousands of 1099s per year. Thus, payers who file 250 or more Form 1099 reports are required to file all of them on either magnetic tape or floppy disk.

    Form 1099 is also used to report interest (1099-INT), dividends (1099-DIV), sales proceeds (1099-B) and some kinds of miscellaneous income (1099-MISC). Blank Form 1099s and the related instructions to the forms can be downloaded from the IRS website (http://www.irs.ustreas.gov/formspubs/lists/0,,id=97817,00.html).

    Payees use the information provided on the 1099 forms to help them complete their own tax returns. In order to save paper, payers can give payees one single Combined Form 1099 that lists all of their 1099 transactions for the entire year. Taxpayers are usually not required to attach Form 1099s to their own Federal income tax returns unless the Form 1099 includes a report for Federal income tax withheld by the payer from the related payments.

    [edit] Variants for Form 1099
  10. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    I cant properly explain it SF, but a sub contractor is performing work for someone else who has sold the work. The original contractor issues the sub a 1099 and forwards it to the IRS.

    An independent contractor is very similar but cant be told when to report to perform the job etc etc etc....Independant contractors are issued a 1099 and its forwarded to the irs by the perosn they work for.

    A contractor or busines "Owner" issues a receipt for the money collected so the person the work was done for can claim it as an expense for a rental property if thats what it is.

    The Contractor/Businessman then takes the cash, or check he is issued and claims that income on his taxes. The IRS prefers contractors are paid by check written to them, or the business name for documentation after the fact.

    I think you guys are confused about 1099's.

    Now realize. I am certainly not a tax expert but ive been in business in one fashion or another for a total of 8 years over time and the only 1099 I get is from the company I subcontract for.

    If im wrong Ill eat crow, and learn something new, but I dont think I am.
  11. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    I understand that SF, but is some dude that rents out his house or whatever because he moved in with his girlfriend or whatever , a legitimate business?
  12. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Yes, he could own a dozen rentals, who knows?..

    But he is trying to run it as a legitimate business.
    No matter where he is sacking up at.
    Last edited: Dec 4, 2006
  13. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    I have to say too that this year was the first year I did work for a business. Other than that its all non business people.

    Last year I subcontracted and was issued a 1099 for that income which I filed on my taxes, but Im curious to see if this company I cut grass for this year issues me a 1099.

    What if they dont?
  14. john boardman

    john boardman Member
    Messages: 44

    It all depends upon how your business is structured. If you work alone with no employees and the customers you have write a check to you personally (your name) you are probably working off your SS# so you'd have to give them your SS# as you are not at least an LLC and have not applied for a federal EIN. Here in Iowa as a sole prop. w/o employees or workers comp. you would not be required to have a EIN.
  15. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    Well thats me. Sole proprietor, no employees.

    Im considering an LLc but I carry a ton of insurance and I dont own this house. The mortgage company does and I have few assets. Very few. I may not go LLC untill I feel the need to.

    And all my customers write the check out to my business name for which I have a DBA. Those checks are deposited in my business account at the bank.
  16. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Will that be white wine with your bird this evening, Sir?
    Last edited: Dec 4, 2006
  17. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    christ. Now you guys got me all confused about taxes. I need to talk to my accountant but theres never been any mention I am doing anything wrong now....(having filed business income last fall for 4 months) and or for the six years I did this the same way in the early ninties.
  18. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    So let me ask you.

    I do 600 dollars worth of work for a business that hired me to say cut grass all year. They have to issue me a 1099? Even after I have acccounted the income in my books to file on my taxes, and deposited their check in my business account?

    .Keep in mind Im a sole proprietor and everything gets funneled onto a 1040.
  19. bterry

    bterry Senior Member
    Messages: 183

    No, but they could. It is up to them. SnoFarmer has been right on the mark on this whole thing. I provide it to anybody that asks for it - as it is required by the tax laws. I suggest you provide the number. The only reasons I can think of not providing it is to try to hide income, or attempt to prevent identity theft - neither of which will fly with the IRS.
  20. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    It might help if you think of it this way: The 1099 is not for your benefit, but for the benefit of the taxpayer who is PAYING the money shown on the 1099. That person (or business) needs the 1099 as record of payments made to another person or business.