Complete Guide to W-9s and 1099s
Last updated: January 23, 2025
Overview
This guide covers everything you need to know about W-9 forms and 1099 reporting requirements, including who needs them, when they're required, and how they're handled in Every.
W-9 Requirements
Who Needs to Submit a W-9?
- US persons providing services, including:
- Independent contractors
- Sole proprietors
- Partners in partnerships
- LLCs (unless classified as C or S Corps)
- Law firms and attorneys (even when organized as C Corps)
- Medical and health care providers (even when organized as C Corps)
- US-based landlords receiving direct payments from business accounts
Who Does NOT Need a W-9?
- Non-US based vendors and contractors
- Foreign companies (even if they have US bank accounts)
- International contractors
- Vendors paid via credit card
- Employees paid through payroll systems
- C and S Corporations (except law firms)
Special Cases
For foreign entities:
- W-9s are not required
- W-8BEN-E can be collected for record-keeping but is optional
- W-8BEN-E forms are not filed anywhere, similar to I-9 forms
1099 Requirements
When to Issue 1099s
1099s must be issued when:
- Payments exceed $600 in a calendar year
- Payments were made via ACH or wire transfer (not credit card)
- The recipient is a US person or entity
- Payments were made for services (not goods)
Payment Threshold
- The $600 threshold applies to the total payments made during the calendar year
- This includes all payment methods except credit cards
- Payments are counted based on when they were made, not when services were rendered
Timing and Deadlines
- 1099s must be issued for payments made during the calendar year
- The payment date determines the tax year, not the service date
- Example: A December 2024 payment for January 2025 services requires a 2024 1099
How Every Handles W-9s and 1099s
Automated Processing
Every automatically:
- Collects W-9s through the bill pay flow
- Generates 1099s for contractors paid through the platform
- Handles year-end tax documentation
- Processes payroll-related 1099s
Bill Pay Flow Benefits
Using Every's bill pay flow provides:
- Automatic W-9 collection from vendors
- Automated 1099 generation at year-end
- Proper accounting categorization
- Documentation management
Special Situations
Rent Payments
- Use Every's bill pay flow for rent payments
- Upload lease agreements as invoices
- System automatically handles W-9 collection and 1099 generation
- Applies to both direct landlord payments and subleases
Contractors and Vendors
- Every automatically generates 1099s for US contractors paid through the platform
- Vendors paid through Pay Bill flow can request 1099s directly from the Vendors Dashboard
- No action needed for contractors paid through Every/Rippling/Gusto as 1099s are handled automatically
FAQs
Q: What about payments made through other platforms (Brex, Mercury, etc.)?
A: These payments need to be tracked separately and has to be handled by your accountant.
Q: Do I need a W-9 for a residential landlord?
A: Yes, if payments are made from a business account and exceed $600 annually.
Q: What about Canadian companies with US bank accounts?
A: They should provide a W-8BEN-E instead of a W-9, though this is primarily for record-keeping.
Q: Do I need to issue 1099s for payments made via credit card?
A: No, credit card payments are reported separately by the card companies.
Q: What documentation is needed for sublease payments?
A: Upload the sublease agreement through Every's bill pay flow along with any required W-9 information.
Q: How are international payments handled?
A: No W-9s or 1099s are required for international payments, regardless of payment amount or method.
Best Practices
1. Use Every's bill pay flow whenever possible
2. Collect W-9s before making payments to new vendors
3. Keep accurate records of all payments
6. Request 1099s through the Vendors Dashboard when needed
Remember: When in doubt about whether a vendor needs a W-9 or 1099, check their US person status and payment method first.