1099s and DE-542

published January, 2010

Pay any contractors more than $600 in 2009? Any lawyers or non-corporations? Pay rent to a non-corporation? An LLC is not a corporation, so they’re not excluded from 1099 reporting requirements.

If you need assistance with filing your 2009 1099s, please contact us early, we tend to get scheduled up towards the end of the month of January, when the 1099s are due to contractors.

Unfortunately, you can’t download 1099 forms, they have to be “scannable” and there’s a $50 penalty for filing 1099s that are not scannable. If you just don’t file, and you get audited, the IRS might disallow the deduction, which is probably worse than the minor penalty alone.

Going to pay any contractors more than $600 in 2010? You may need to prepare EDD form DE-542 within 20 days of determining you will pay more than $600 in the calendar year, each year. Here’s a link to the form, it may be downloaded and faxed http://www.edd.ca.gov/pdf_pub_ctr/de542.pdf or, you can complete the form on-line at: http://www.edd.ca.gov/Payroll_Taxes/FAQ_-_Reporting_Independent_Contractors_Online.htm

I’m currently working on an article for publication about reporting (and possibly withholding) requirements for paying foreign people. I’m afraid the tax code is a bit of a mess on this.