Ok I own my electrical company and for some reason I have been getting away with telling people I don't do w-9 forms.
I have been saying this because in the past I asked my accountant about these and he said, don't worry about it. I have no clue about taxes. I have an accountant that I give my Quickbook files to at the end of the yr., reciept totals and he askes me a few generic questions. I pay what the forms say when hes done and thats it taxes are done.
Now it seems everyone is requesting a W-9.
So my question is, if I start filling out w-9s for people am I going to get a bunch of 1099 at the end of the yr?
(I would ask my accountant, but he not availible and I'm filling some of these out today)
Let's back up a bit. IRS rules require that you begin witholding taxes from any employee after you pay them $600 in one year. Your one 'escape' from this is if the payments were made to 'contractors,' rather than 'employees.'
The W-9 form is used by your customers to document that you were a contractor, and not an employee. If their books are checked, the W-9 is another link in the chain.
1099's are another matter. Keep in mind that the customer is under no obligation to send YOU a 1099. It is very possible that an audid of your books might have, as its' original reason, a desire to confirm data provided by a customer; the customer might be the real target. If the ABC Co. claims to have paid you $50K last year, and your records indicate you only billed them for $1K, there's a problem somewhere.
A similar type of investigation has resulted in some simply massive enforcement actions against illegal workers and their employers. Joe Smith is asked why he failed to report wages that he never received - the employer was using Joe's identity to 'document' an illegal. The employer usually gets this information from job applications.
I would not woory about 1099's. I would worry about providing your accountant with accurate information.
Re: Electrical Contractors & W-9 form questions.
#200997 05/02/1105:36 AM05/02/1105:36 AM