Now that it’s renovation season, we thought it would be a good time to talk about contractor paperwork. According to the Internal Revenue Service, a contractor is a 1099 contractor if you paid them at least $600 in services (including parts and materials), and they’re not a corporation. This means you have to mail the contractor and the IRS a form 1099-MISC.
But be careful! LLC’s are not necessarily corporations! For tax purposes, LLC’s can be treated as partnerships or corporations. You need to know which they are.
How Can you Tell if an LLC is a 1099 Contractor?
Ask them to fill out form W-9. You’ll see when you view it that there’s a section where they must indicate their tax status: