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Thread: What's involved in a 1099 for web designer? New York

  1. #1
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    Default What's involved in a 1099 for web designer? New York

    Hello all, I wish to do web design as an independent contractor, I am seeing some ads mentioning 1099, can anyone tell me what's associated with a 1099 please? I am confused about the info I am finding on the net.

    So I take on a job for a business to design their site and they request a 1099, what happens then, what documentation would I need to provide them with?

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    First of all, there are no "magic words". Saying you are 1099 does not make it true. Assuming you are truly meet IRS independent Contractor test rules, then ....
    - The customer (who is NOT your employer) should have you file out a valid W-9 form prior to any work being done. They might require other paperwork as well.
    - Payment should be made by Accounts Payable with no taxes withheld.
    - At year end the customer issues a 1099-MISC form. You use this for your 1040.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    To add to what DAW wrote, there are a few additional details worth noting.

    A business that pays an independent contractor for services is only required to report the payments if the payments are at least $600 in the calendar year. If the payments to you are less than $600, no 1099-MISC is required.

    If your web design business is a corporation (even a small, one person corporation), you should not be getting a 1099. Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation) are not required to be reported, with some exceptions that don't seem applicable to your case.

    Note that although reporting may not be REQUIRED, some customers may end up sending you a 1099-MISC anyway.

    Also, to the extent that you hire any subcontractors who are not treated as employees and pay them at least $600 in a calendar year, you are also required to report those payments on a 1099-MISC.
    David K. Staub (www.illinoisbusinessattorney.com)
    Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

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    you should consider getting business/workers compensation insurance - this comes into play sometimes if the company you are working for doesn't want to have to pay WC insurance for you - the audit of their insurance plan will show that they have IC/1099's and if you can't prove insurance they have to pay premiums. Plus it's always good to protect yourself from things like errors, mistakes,unfulfilled contracts, etc. Think about what you could be sued for (and it is probably more than you think) and cover yourself.

    That and always, always have a written contract. Verbal is NOT good enough. Visit and attorney and figure out what is important....Spell out how you can terminate the relationship, etc. Some companies might already but it would be good for you to know what you want to be looking for. The worst time to have to challenge a clause in a contract is after it is signed.

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    Alright so the customer gives to me a filled out 1099 which I take to my accountant so I don't have to fill out anything on the 1099 forum, is this correct please?

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    Quote Originally Posted by dkstaub View Post
    Also, to the extent that you hire any subcontractors who are not treated as employees and pay them at least $600 in a calendar year, you are also required to report those payments on a 1099-MISC.
    Also, in order to treat "sub-contractors" as independent contractors, they also must pass the IRS rules.

    Companies I have worked for collect not only the W-9 but sufficient information to convince a skeptical IRS auditor that this really is an IC. This might include a link to their website and references from prior customers. We used to get yellow page ads and D&B reports. IRS always has a "the worker is an employee" bias.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    Yes, that is correct. The 1099 form is to report your income to, well really the IRS, because they will get a copy of it as well, but in theory, to you. (Note that you should be keeping your own books and know how much money you made and should pay taxes on whether they send it or not. Including whether it's under the $600 threshold where they need to give you a 1099). You don't alter or put in any information on it at all.

    And yes, then you will need to pay taxes on the money, which you can either do yourself or hire an accountant. (If you are asking these questions, you should hire an accountant). Also, if independent contractor web design work is your primary source of income, you will probably need to make quarterly estimated payments of the tax. Be sure to save a portion of your money (probably at least 30%) to cover your eventual tax bill.
    Last edited by ferretrick; 09-28-2017 at 05:53 AM.

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    Quote Originally Posted by DAW View Post
    The customer (who is NOT your employer) should have you file out a valid W-9 form prior to any work being done. They might require other paperwork as well.
    What other paperwork might they require please? I would think since there is no license for a web designer then all they should need is my SS#?

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    What any particular company/client might require is going to vary. Most common would be your Tax ID number for your business, proof of liability insurance, and proof of WC coverage.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    I have worked for companies where they needed to know if the contractor is woman or minority owned. Purchasing could need many things for their own purposes (such as the last answer indicate). I we are looking at IRS only, go to their webpage on "employee vs. independent contractor", and look for the tests. Ask your self what information you need show IRS the test was passed. I like website / prior customer references (at least) because it shows the contractor has had prior customers and is looking for new ones. Which is one of the major tests. If you cannot show the contractor has worked for someone other then you, you are generally in a very poor audit position. If there is an actual license, you are correct you want to copy it. Web design is tricky classification wise, since it is something an employee (maybe) could have done. Look at the IRS website.
    https://www.irs.gov/businesses/small...ed-or-employee
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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