Tick tock, each year we like to remind our brokerages to issue all of your Form 1099s by January 31, and send in the transmittal Form 1096 to the IRS before January 31st as well (Please note the change!!). According to the IRS, Brokers/brokerages must issue and file a 1099 MISC for each person whom you have paid during the year, at least $600 in services. Which leads us to ask… Is an LLC a person or a corporation? It depends on how the LLC is taxed.
- You DO NOT have to issue a 1099 MISC to a LLC that has elected to be taxed as a corporation (C or S corp).
- You DO need to issue a 1099 MISC if the LLC was setup as a single member or partnership that did not elect to be taxed as a corporation.
How do you tell? Did you get a completed W-9 when issuing the commission check during the year? Businesses who pay service providers are required to obtain the W-9 before submitting the year end 1099 reports. If so, the LLC entity indicates how they should be taxed.
REMEMBER THIS GREAT ADVICE FROM OUR ACCOUNTANT:
“It never hurts to issue a 1099, or to receive one, even if it is not needed. The trouble lies when you don’t issue a 1099 when you should.”