Feb 18, 2010 from
Anonymous
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I hired a few contractors last year and I know I need to send out 1099's but what if the contractor is a LLC? I am in California.
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If you hire a contractor to do work for you it is not necessary to send a 1099 IF the corporation is a C-Corporation or an LLC that has elected with the IRS to be taxed as a corporation. Most individuals that are performing contract work are LLC's that are closely held with one or two members. These LLC's are usually taxed as a partnership, i.e. flow through taxation with income reported on a K-1 to each member and you would be responsible to report the payments you made to them on a 1099. However, rather than trying to determine what election the LLC you worked with made, either ask them for a copy of the documentation when they perform services for you and attach it to the W9 form or play it safe and send out the 1099.
Accepted AnswerI hope that helps...now go work on those 1099's...they were due to be mailed out to the recipients by February 1, 2010:) Please let me know if I can help further.
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