Yes. If the LLP files taxes as a partnership or single-member LLC, a 1099 form is required. Failure to generate a 1099 can carry penalties, whereas generating one for a corporation has no penalty.
The Internal Revenue Service requires LLPs to issue 1099s to independent contractors paid over $600 a year. The IRS specifies partnerships, including limited ones, get 1099s if paid over $600 for transactions. They report income not subject to withholding, like W-2 forms. According to the IRS, LLPs must send Form 1099-MISC to non-business service providers paid over $600 a year. Your LLP must also get 1099s from clients paying over $600 in fees yearly.
Your LLP must get W-9s from service providers needing 1099s. It contains data to monitor payments and complete 1099s after the tax year. Your LLP must issue 1099s by January 31 after the year ends, filing them with the IRS by February 28. The deadline extends to March 31 for electronic filing. The IRS may levy penalties for missing deadlines.
Sending 1099 Forms to LLCs and Independent Contractors
The Internal Revenue Service requires business owners, including sole proprietors and self-employed taxpayers, to send IRS Form 1099-MISC to certain payees. They must send the forms to independent contractors, other business owners, vendors, subcontractors, and suppliers by the end of January.
You are not required to send a 1099-MISC form to a corporation, including both C corporations and S corporations. Individual sole proprietor LLCs may require a 1099-NEC if they are taxed as a sole proprietorship. Who gets a 1099 MISC? Generally, anyone who was paid $600 or more in non-employment income should receive a 1099.
Deadlines and Penalties
The deadline to issue 1099 forms is January 31st. If you fail to meet the deadline to issue a 1099, you may face a fine from $60 to $310 for every form, depending on the delay. In some cases, the IRS may grant an extended due date for filing 1099-NEC and 1099-MISC forms.
Payments to a corporation do not need to get a 1099 form. The IRS also exempts payments made for certain items or to certain individuals, including payments made to companies for telephone, freight, or similar items. Payments made for the purchase of merchandise are also exempt from reporting.
Businesses will file Form 1099-NEC for each person to whom they paid at least $600 for services performed by someone who is not the payor’s employee. Generally, an entity sends 1099 forms to most small business LLCs if they meet the $600 threshold. However, if working with a foreign contractor who works remotely from another country, you do not need to file a 1099 for them.