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How to do 1099's?

1099s -- who pays taxes?

  • My LLC received payment for services and is being issued a 1099 for the full amount from the client. However, the LLC engaged 2 contractors who will be receiving approximately 50% of the payment. Do I need W-9s from these contractors, and then issue them 1099s? When I pay them their 50% share, I do not withhold any taxes, correct? When it comes time for my LLC to pay taxes, do I only pay taxes on the 50% of the payment that the LLC retained? For tax purposes, how do I handle the amount that is distributed to the contractors?

  • Answer:

    Yes,get W-9's issue 1099's, and you don't withhold taxes. You'll show the entire amount you received as income, and what you paid to the contractors as expenses.

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You issue 1099's to your contractors, yes. You do not withhold taxes. You include all incoem and all expenses on your return. The money paid to the contractors is an expense.

Go to a tax preparer.

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