We work with many solopreneurs and small business owners who have questions about taxes and forms and paperwork that might be required when working with vendors like True Story. We’re no tax experts (our accountant gets a LOT of love and the occasional batch of homemade gingersnaps), but here are some quick notes to clear up those muddy waters.
The low-down on IRS Form 1099
Form 1099-NEC is used to report payments made to non-employees (like freelancers, consultants, and independent contractors). Generally, you’ll send this form if:
- you’re paying more than $600 in a calendar year
- you’re paying your vendors as a business (vs. through a payroll system)
… but keep reading, because this isn’t the whole story! (Good news ahead…)
If applicable, you’ll need to file the form with the IRS and send a copy to your contractor. The deadline is January 31 each year for both, and you can file online through services like:
- Tax1099.com
- Track1099
- …or through your accountant or payroll provider
You do NOT need to send True Story a 1099
Our clients do not need to send us a 1099. Rejoice! This is because we operate as an LLC taxed as an S-Corp, and the IRS doesn’t require 1099s for payments made to corporations.
Happy to confirm our tax status if needed.
What about W-9s?
Form W-9 is the form you request from vendors and will help you determine whether you need to issue a 1099. If you’re not sure for any of your vendors whether to send a 1099, collect a W-9 anyway – then ask your accountant (forgiveness, not permission… right?).
Each vendor should fill out their own Form W-9 to provide you with their:
- Legal name
- Business entity type (sole prop, LLC, S-Corp, etc.)
- Address
- Taxpayer Identification Number (TIN or EIN)
You can download a blank W-9 from the IRS and send it to each contractor or vendor you work with, asking them to fill it out and return it. That’s standard practice. We keep one on file and will send it to you with your first invoice.
You keep all completed W-9s in your records – no need to send them to the IRS.
Here’s what we’ll send you (no need to chase us down)
When we start working together, you’ll receive from us:
A signed W-9
I have a current, signed W-9 ready to go, which will remain valid as long as True Story’s business info stays the same. (Fun fact: We changed our name once early on and if all the hours we spent cleaning up THAT mess were billable, we’d be in a different tax bracket! …Kidding, but the feeling is REAL.)
Clear invoices
Every project or retainer gets a itemized invoices, which makes it easy for you to track payments and expenses come tax time. These invoices come from Wave. We can easily send receipts at any point if you need to clear up any accounting discrepancy. If your tax preparer has any specific requests, we’re happy to try to accommodate.
TL;DR
- You don’t need to send True Story a 1099.
- You may need to send 1099s to other freelancers or vendors.
- If you are sending 1099-NECs to any other vendors, mark down January 31 as the date to both send these forms to your vendor AND submit them to the IRS.
- Always get a W-9 and keep track of your payments.
You may have brought us on for the big ideas, but we’re not above a tidy paper trail. 😉