No. of Recommendations: 0
Do you send a 1099 to unincorporated contractors but not to incorporated contractors?

Correct. I called the IRS last year to ask about this exact thing, and the rules are that you only need to send 1099's to unincorporated contractors. The others are lumped together with the 1099 contractors under the 'Wages' category, assuming these are contractors hired to do some work. Materials from the lumber yard all go under the materials category. And the IRS also said that you do not have to send a 1099 for anyone you paid less than $600 in the year. However, regardless of whether or not you send a 1099, the recipient is responsible for reporting the income and paying taxes on it, but that is the recipient's problem, and you don't need to be concerned about it.

When you mention "tax number", are you referring to a taxpayer ID number? I have operated several businesses as a dba and never had a separate tax number.

Yes, I was referring to a tax ID. You only need one if you have employees, so even with a DBA, you could use your own SSN. Some people, however, prefer to get a tax ID for their business income, and that is allowed, but you are only required to have a tax ID separate from your SSN if you have employees.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.