Good morning! Can anyone provide feed back regarding the following…I’m a freelance personal trainer. One of my clients has asked for my ss# to fill out a 1099 tax form for their tax purposes. I’m not employed by them through their business however they have paid me from that checking account. Should i give them this info?
You’re more likely to get an accurate answer if you ask the IRS rather than web developers.
@kellygreen24; Welcome to Sitepoint. You are free and encouraged to participate in any of the discussions you find here.
Realize, though that
- This board is INTERNATIONAL. Your question is very country-specific (I assume you are in America)
- This board is dedicated to Web Design, Web Development, Web Marketing. Although many of the members are self-employed none of us professes expertise in matters that really should be directed to a lawyer
I’ve moved this thread to Business & Legal Issues.
Although IMO the best advice has already been given by Jeff, in this forum you’ll have more chance of getting an answer (which, of course, you should always check with an expert (lawyer, accountant, whatever)).
If you are operating as an individual, i.e. a sole proprietorship and your client paid you over $600 during the tax year, then they probably have to 1099 you, yes.
If you are operating as a business, they probably don’t have to 1099 you but you have to be a fully formed corporation or LLC. A single-member LLC is sometimes disregarded so you might have to get a1099 even if you have an LLC.
Whether they pay you from their personal or business account shouldn’t matter. So, how are you operating? As an individual?
I wouldn’t worry about it too much as long as the 1099 is accurate and reflects the amount of income you actually got from them. Unless you are trying to hide income, it shouldn’t effect anything.
Sagewing’s first sentence is correct, but the rest of the first paragraph is not. A business must give a 1099 to any service provider OTHER THAN a corporation. Than means if you are operating as an individual, LLC or a partnership, the client must issue a 1099 to you.
And you are required to provide your social security number (or taxpayer identification number, if operating as an entity).
Do you have a source for that information? If an LLC is disregarded by the IRS you will get 1099’ed but if it’s filing as a sub-chapter S (like mine) then you don’t need one. Source: legalzoom.com (and there are plenty of other sources).
Sagewing, your restatement is correct as to S corporations. However, your original statement that “If you are operating as a business, they probably don’t have to 1099 you” is absolutely not correct except as to corporations and S corporations (or LLC’s electing to be treated as such). My statement was a little simple because I thought it would be more confusing than helpful to get this detailed, but here we go:
Payments of $600 or more to individuals or partnerships require that the payor provides a Form 1099.
Payments to corporations do not require a Form 1099 (there was a proposal last year to require 1099’s to everyone receiving $600 or more, but for the time being that is off the table).
Are you an LLC? Not in the eyes of the IRS! If your business is operated as an LLC for state law purposes, it is either a disregarded entity (if it is a single member LLC), a partnership or a corporation for Federal income tax purposes. There is no specific treatment for LLC’s in the Internal Revenue Code.
For Federal tax purposes, the default treatment of a multi-member LLC is that it is a partnership. That is, if you do nothing, the IRS will treat your LLC as a partnership. You may, however, choose to be treated as a corporation by electing to such treatment. If you file a S corp election for your LLC, you are deemed to have also elected to have it treated as a corporation.
Although there are many circumstances where it makes good sense to file an S corp election for an LLC, the overwhelming majority of LLC’s are treated as either disregarded entities or partnerships. If, like Sagewing, you have chosen to have the IRS treat your LLC as an S corporation (or corporation), then for tax purposes it IS a corporation in all respects, including for the purpose of receiving Form 1099.