If you don’t collect new W-9 from vendor’s regularly, you should start collecting them now.
A W-9 has all the relevant information to determine if you need to or not issue a 1099-M or 1099-Nec to your vendor.
The IRS requires businesses to report payment of nonemployee compensation of $600 or more on Form 1099-NEC instead of on Form 1099-MISC. Businesses also need to file Form 1099-NEC if the business withholds federal income tax from a nonemployee’s compensation, regardless of the amount of the payment.
Form 1099-MISC must be issued to each person to whom you have paid during the year:
- At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
- At least $600 in:
- Rents.
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.
In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.
So, make sure you have recent W-9’s on file for all vendors.