Do businesses need to have a w9 on file for every vendor who supplies a service regardless of the amount they were paid? Also, what defines a service? Many discussions I have read say that all vendors that are paid $600 or more should get a 1099. I thought only vendors who supplied a service were to receive 1099s.
Yes every vendor that your company pays $600 or more for the entire year is due to have a W-9. A Service is any kind of work a vendor does for you and gets paid. You should have any vendor that is a Corporation to fill out a W-9 if they are going to be paid $600 or more. Hope this helps!
So, do only vendors who perform a SERVICE totaling $600 need to get a 1099? Some vendors sell products.
Only vendors that are not incorporated and that you pay more than $600 for services they performed for you receive a 1099. It is best from a legal standpoint to have a W-9 on file for all vendors, whether incorporated or not. Then if there is ever an issue or dispute, you have proof. I make all our vendors complete and return the W-9 to me before I pay them. Money is a motivator in getting them to complete it. If you wait until after they have been paid it can be very difficult to get that information. A service is any work a person performs for you, whether it is cleaning your office, repairing your sink, or mowing your lawn. If you pay them more than $600 and they are not on your payroll, you are required to issue a 1099.
This may have been too much informtion but I hope it helps.
