Which 1099 form do I use for subcontractors?

Form W-9
At the end of the year, use Form W-9 to complete Form 1099 for each subcontractor you paid. This shows the IRS the income the subcontractor received from your company. Also, file Form 1096 to show the total amount you paid to all your 1099 subcontractors.

Can you deduct contract labor without a 1099?

But the IRS auditor says you cannot deduct an expense if you did not send out Form 1099. Your subcontractor labor can be a pretty significant amount, maybe your largest expense. The tax you would owe if your subcontractor labor expense is disallowed would be staggering.

Do I need to issue a 1099 to my contractor?

A company must provide a 1099-NEC to each contractor who is paid $600 or more in a calendar year. Independent contractors must include all payments on a tax return, including payments that total less than $600. Note also that nonemployee compensation includes payments to individuals and partnerships.

When do I need to file a 1099 for a subcontractor?

Companies that pay an independent contractor $600 or more for services provided during the year must provide the contractor with a Form 1099-MISC by January 31 of the following year.

Is the contractor reimbursement a 1099 reportable expense?

January 04, 2020 01:50 PM The crux of the matter is who has the expense receipts – if you get them, then you are reimbursing the expense and it is not 1099 reportable. if the contractor keeps them as his expenses, then the whole amount you pay him is 1099 reportable

Where does the tin go on a 1099 for a contractor?

The RECIPIENT’S TIN is the contractor’s SSN or business TIN. Under the RECIPIENT’S name, use the contractor’s name and address. The total amount you paid him for the year is input in Box 1 Non-employee compensation.

Can a subcontractor be classified as an employee?

On occasion, independent contractors hire subcontractors to complete certain engagements who may be classified as employees or contractors for tax purposes. In these cases, the original contractors become employers and must adhere to the same rules governing expense reimbursement, albeit from a different perspective.