Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Biz Owners: Know what you need to do with backup withholding to stay compliant.

Name: Painting Biz Owners: Know what you need to do with backup withholding to stay compliant.
Uploaded: 2023-10-04T13:15:01+00:00
Duration: 48 s
Channel: Daniel Honan
Description: This content was created by balanced-griffin. This content was uploaded by balanced-griffin. This is a YouTube video titled "Painting Biz Owners: Know…

4 Oct 2023 · 1 min

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This content was created by balanced-griffin. This content was uploaded by balanced-griffin. This is a YouTube video titled "Painting Biz Owners: Know what you need to do with backup withholding to stay compliant." The excerpt is a single-speaker informational segment (recorded 2023-10-04) providing tax compliance guidance for painting business owners: explaining backup withholding when a contractor refuses to provide a W-9 or taxpayer ID, the 24% withholding rate, and the payer's potential liability if they fail to withhold and remit to the IRS.

Chapters

if you owe a contractor money and they refuse to fill out the W-9, there are provisions to protect yourself. And that's where backup withholding comes in. To kind of define what that is, backup withholding is essentially when you withhold taxes from a contractor's payment and then you remit those taxes to the IRS on behalf of the contractor. Now that's only necessary when you can't get that W-9. And that taxpayer ID number or Social Security number. It's important that we do that because if we don't withhold— 24% is what the backup withholding is— if we don't withhold that 24% and they never give us the W-9, we could become liable to paying that backup withholding to the IRS, and we don't want to have to pay somebody else's taxes for them.