Lynda ArtesaniLegal Accountant and Data Migration Specialist at The Proper Trust

You only paid $400 - Do you have to fill out the W9?

28 Jun 2024 · 1 min

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0:55

In this conversational video, Speaker A asks how to handle situations where a client disputes the need for a Form 1099 despite a low payment amount. Speaker B explains that any payer can issue a 1099 regardless of the $600 reporting threshold, even for amounts as low as a few cents, and that the threshold only dictates the payer’s filing requirement, not the recipient’s obligation to report the income. The discussion emphasizes that the primary concern is with payers who must decide whether to issue a 1099, while recipients often become upset because they must report the income regardless of the amount. The speakers also note that the issue is not about the thresholds themselves but about the administrative choice to issue a 1099 and the recipient’s need to handle the reported income.

Chapters

Do you get contacted by people who say that their client is arguing with them about sending a 1099? Yes. And how do you handle those? I mean, dumb question, right? But how do you handle those?
Yeah, I mean, well, one, everybody gets a 1099 if you want one, even if it's not within threshold. I mean, we had those arguments all the time, but I only paid them $400. Like, if they sent you a 1099, it doesn't matter. The threshold is just a requirement. Right. You can send a 1099 for a 10-cent payment. Well, for a dollar payment, because the pennies get rounded off. You can, you can send a 1099 for a $1 payment if you want. It's not about the thresholds and the rules about, you know, why did you get me a 1099? Luckily, we usually are dealing with payers, not recipients too much, right? So the people sending the 1099s, not receiving them. When you deal with people receiving them, they're the ones who get really upset. They got, they have to report that income.