W-9's: Who Gets Them and When?
With the Internal Revenue Service cracking down on the issuance of Form1099's, most employers are finding themselves running around to get the necessary information to issue a Form 1099. Form W-9 is the Request for Taxpayer Identification Number and Certification and should be completed and received before any work is performed or payment is made. The completed Form W-9 will give the employer all the information needed to issue a Form 1099 on a timely basis.
A Form1099-MISC should be issued to any individual or company that was paid $600 or more during the calendar year. Some exceptions to issuing Form 1099's include, but are not limited to; payments of rent to real estate agents, employee reimbursements, payments for merchandise, and generally payments to a corporation.
The penalty for not filing Form 1099's is $30 per return if they are filed within 30 days of the due date (March 30, if the due date is February 28); maximum penalty $250,000 per year ($75,000 for small businesses).
Have you postponed funding trusts or transferring ownership in your family limited partnership because of the tax implications of such gifts? The American Taxpayer Relief Act of 2012 now permanently "re-unified" the Unified Credit, significantly increasing the amount of lifetime exemption available to you if you have not already used your exemption.