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Thread: Why would someone ask for my Taxpayer ID number?

  1. #11
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    Now that Harold has been answered, can I continue this conversation with a related question or two?

    1. When you do work for GE, let's say, as a tiny independent contractor, they'll likely ask you to complete a W-9 and eventually send you a 1099-MISC if they paid you more than $600 for the year. But GE services milions and millions of dollars' worth of medical equipment in hospitals around the country every year. Does every hospital that spends more than $600 send GE a W-9 request and issue them a 1099-MISC?

    2. I pay my yardman more than $600 a year. Should I have him complete a W-9 and issue him a 1099-MISC every year?

    3. What about my airconditioning man, and my plumber and my auto-mechanic, the handyman that built a small shed for me and the painter I had in and the floor layer that replaced the carpets and the lady that comes in to clean them once a week? What about my wife's hairstylist, her nail salon, her yoga classes and ballroom dancing tutor and seamstress and... and... and... Are we - as individuals - supposed to keep a record of everything we spend with everybody and get a W-9 and issue a 1099-MISC to everyone with whom we spent more than $600?

  2. #12

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    Frederick, I've sold thousands of dollars of equipment to a GE employee working in the field buying on a credit card and don't recall a W-9 in this type of situation. Its only when a company is organized such that all purchases go through purchasing and a PO is issued that this happens. Even then, I would say its 5% of the time even with a company like GE.

    The other half of your question is better answered by Evan or David as you are asking what legally companies should be doing.

  3. #13
    Mr. Tax Man
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    Quote Originally Posted by eborg9 View Post
    OK, I get it now.
    Strange that no one has ever requested this before since the majority of my jobs are over that $600 threshold..
    It's difficult to get client's to comply. I generally ask my clients if they've paid any individual or company over $600 a year. It can't hurt to request one on all clients... As partnerships, LLC's, and LLC's, generally will require one. On some of my clients, I'll prepare a 1099 for myself, as I'm not "exempt" from it either.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  4. #14
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    Quote Originally Posted by Spider View Post
    Now that Harold has been answered, can I continue this conversation with a related question or two?

    1. When you do work for GE, let's say, as a tiny independent contractor, they'll likely ask you to complete a W-9 and eventually send you a 1099-MISC if they paid you more than $600 for the year. But GE services milions and millions of dollars' worth of medical equipment in hospitals around the country every year. Does every hospital that spends more than $600 send GE a W-9 request and issue them a 1099-MISC?

    2. I pay my yardman more than $600 a year. Should I have him complete a W-9 and issue him a 1099-MISC every year?

    3. What about my airconditioning man, and my plumber and my auto-mechanic, the handyman that built a small shed for me and the painter I had in and the floor layer that replaced the carpets and the lady that comes in to clean them once a week? What about my wife's hairstylist, her nail salon, her yoga classes and ballroom dancing tutor and seamstress and... and... and... Are we - as individuals - supposed to keep a record of everything we spend with everybody and get a W-9 and issue a 1099-MISC to everyone with whom we spent more than $600?
    1. GE is a corporation, and doesn't need to be issued a 1099-MISC. I'm sure they still receive many though just to say they've covered all their bases. Many large businesses may also include their EIN right on their bill, as it just makes it easier for their vendor. It may also make a difference as it may have been bought by GE Subsidiary B, and not GE Subsidiary A like usual.

    2. Only payments as part of your trade and business need to be reported, not your personal transactions. If you use your home as an office and deduct it as part of your business expenses (including these associated expenses), it is still personal. You're just allocating a portion of its upkeep to the business. If this was at your place of business, then these people should be reported, but only assuming it is an individual or partnership providing the service and not a corporation.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  5. #15
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    Ah, that's makes more sense - thank you, Evan.

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    all my prime contractors need my W-9..........i refill out 20 of them every January

    they need it to send in to the IRS to show that they paid me

  7. #17
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    If someone sends you a W9 to fill out and you refuse, they can withhold backup federal tax at 25% from the payment due to you.

  8. #18

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    Expanded 1099 reporting requirements were enacted in March 2010. Those rules would have required reporting payments to corporations (like GE) in addition to the current reporting requirements for payments to individuals, partnerships and LLCs. After strong criticism due the burden the new requirements would place on small businesses, the additional reporting requirements were repealed by Congress earlier this year.

  9. #19

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    I have been asked for it for consulting work. It is an IRS requirement like others have already said.
    Tyler Hutchinson
    CEO at Full Circle Business Consulting
    HTTP://www.fullcirclebusinessconsulting.com

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