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Question About Paying for Articles and Sending Out Tax Forms to Writers

by Elvis Michael
6 replies
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I'm not sure this is the right place to ask, but here goes -- in case anyone has experience with this:

Simply put:
If I paid people for a bunch of articles, and the amount ever totals $600 or more, am I *required by law* to send each person a 1099 tax form?

Or can I leave that responsibility to the writer? For example, by saying, "You are solely responsible for keeping track of your earnings and reporting all tax information to the IRS."

Of course, i'm hoping for the latter rather than the former....
Thoughts?

Thanks!
  • Profile picture of the author Floyd Fisher
    Originally Posted by Epic Passive Income View Post

    I'm not sure this is the right place to ask, but here goes -- in case anyone has experience with this:

    Simply put:
    If I paid people for a bunch of articles, and the amount ever totals $600 or more, am I *required by law* to send each person a 1099 tax form?

    Or can I leave that responsibility to the writer? For example, by saying, "You are solely responsible for keeping track of your earnings and reporting all tax information to the IRS."

    Of course, i'm hoping for the latter rather than the former....
    Thoughts?

    Thanks!

    (disclaimer: consult with your tax professional before doing any of this)





    If you pay someone $600 or more for services, you need to do either of the following:


    1. Send them a 1099


    2. Deduct taxes due from what you owe them, and remit to local, state, and federal agencies yourself (and send them a w-2 also).


    You must do one of the two. I assume you didn't do number two, so you now must do number one.
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  • Profile picture of the author seasoned
    I am NOT an accountant, or a lawyer, but here it goes!

    W2 is, I believe, ONLY for an EMPLOYEE! If you do not have a lot of control, and pay them a consistent wage on a regular schedule, you are pretty sure to NOT need a W2. If you DO have control, pay on a given rate, etc... Check the IRS definition of an employee. They have a number of criteria to determine if the person is an employee.

    Now, HERE is the deal! The 1099 is NOT for you! It is NOT for your consultant, etc... It is the IRS's way of multiplying the responsibility of reporting, so they can get as much as possible! So the deal is this. If you make a certain amount, they will INCREASE the rate and amount you owe for, UNLESS it is reduced! Paying another person, over a certain amount, will NOT reduce the amount you owe unless you have backup, and your backup for a payment made to a consultant, etc... is paperwork like the 1099. So the lack of one affects YOU! YOU are expected to report. The IRS then cross references that against your payee to make sure THEY report that income. With the 1099, I believe you are expected to keep a copy, send a copy to the consultant, and another copy to the IRS. So you all have records, etc...

    Steve
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  • Profile picture of the author BarbaraP
    seasoned is right. Your writers are independent contractors and US based ones must complete a W9 for you so that you can supply them with a 1099 (supposed to be mailed by January 31) and send same to IRS. If the writers have their own companies (dba or llc or incorporated) and you paid the company name, you do not send a 1099, you add those expenses in your business expenses and the contractor company is responsible for reporting their income (from their sale of services and products to you) to the IRS.
    (Please check with your tax adviser or tax lawyer before relying on advice from WF for tax related issues.)
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