1099 to LLc's
Submitted by Anonymous on Wed, 2007-06-13 17:11.
Hi Linda,
My question is from the perspective of an employer or a payer, how a payer or an employer will decide if he has to issue 1099 Misc to a LLC. As I read on your website that some LLC's are single member LLC's which are treated just like sole proprietor, in which case the payer has to issue 1099 to the Payee for the payment he made for LLC's services. But how will a payer know if a LLC is a single member owned or a Corporation and who has a burden to decide that.
What will be the consequence of failing to issue a 1099, in the event of not knowing the LLC's true legal status. What are IRS' directives on that.
LLC is a basic level of
LLC is a basic level of asset protection that has tax advantages and must be implemented by every investor who plans to stay in business and be successful in the long run. It is as important to have strong foundation before you build a home as to know law and IRS rules before you get involved in business transactions. The government gives a huge advantage to business and real estate owners in terms of tax deductions and having a business entity is a key to success.
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Interesting question. I
Interesting question. I learned a lot about LLC from this site. Thanks for bringing it up.
Cash for clunkers sure seems
Cash for clunkers sure seems just about helping big business (new car makers) and also political popularity, but not at all about engineered solutions toward addressing economic, environmental, and energy issues. It's only keeping the grand ponzi scheme going for the short term.
Reasons it doesn't help the economy: Increases government deficit, increases debt burden of those who buy new cars, government debt plus interest must be paid back with future taxes or printing money, no return on investment in a depreciating asset, just moves future purchases forward in time, value of old cars is destroyed but money remains in system = inflation.
Reasons it doesn't help energy or environment: energy and resources needed to build more new cars, and associated pollution caused by building new cars. Higher fuel efficiency seems nice, but folks just tend to drive more and use all the energy they can afford. Will the gas savings offset the energy already imbedded in the production of the Motor Cycle Insurance?
Show me an engineering report that demonstrates net energy, economic, and environmental improvements by this program.
The more effective effort should be to promote a whole new living system that doesn't require as much driving to begin with.
Some viewpoints by others...
Check the W-9
Hi,
Yep this can be a little confusing. Bus it's pretty easy if you get a completed Form W-9.
Line 1 of the form is "Name (as shown on your income tax return)". If it's a person's name they're filing as a sole-proprietor on Schedule C & you should file a 1099. If they put the company's name there, it's a little less clear.
In that case either ask them if they file as a sole-proprietor, or if in doubt, send them a 1099 anyway. The IRS doesn't usually complain of over-reporting. :)
Good Luck!
L:)
1099's for LLC S-Corps?
Linda - since it's my first year as an LLC S*Corp status will my invoices be all I have for recordkeeping or will my customers also send end of year 1099's or something too? If they do do they have my company name on them I'd presume since the checks received were in my company name?
Recordkeeping
Hi,
You may still get 1099's even if you're operating as a S-Corp but it's not required. If you do get a 1099 make sure it's in your LLC's name with the LLC's EIN. Don't give out your SSN for payments to your LLC and you shouldn't have a problem.
Even if a sole-proprietor shouldn't rely just on 1099's to determine income. You should have invoices for your billings to document your income.
Hope this helps!
L:)
If you have net operating
If you have net operating losses, i.e., the excess of deductible business expenses over business income, these are reported on Schedule E, and flow to Form 1040, line 17.
An S Corporation is simply a C Corporation (also known as a
standard business corporation) that files IRS form 2553 to elect a special tax status with the IRS. The articles of incorporation that are filed with CA are same whether a corporation is a C Corporation or S Corporation.
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