How to File IRS 1099-MISC forms without an EIN
Businesses are required by the IRS to issue 1099-MISC forms to individuals and businesses that earn more than $600 for goods and services. You will need to gather certain information about the individuals and businesses that contract with you to prepare the 1099-MISC form properly. Among this information, you will need to get a business' Employer Identification Number (EIN).
It's a good idea to review the 1099-MISC filing requirements with your tax professional prior to filing. The filing threshold is subject to change, so be sure you know what it is at the time that you are filing the 1099-MISC forms so you can ensure you are in compliance with this requirement.
Get an EIN Before Paying Anyone
This perhaps is the most important advice. It ensures that you have all the information you need to prepare your 1099-MISC forms annually, it is always much easier to get this in advance than it is after you already have started working with them, and not having it can create tax problems for your business.
To obtain contractors' EINs, have them complete a W-9, which is a form titled “Request for Taxpayer Identification Number and Certification." It is good business practice to have all new contractors and businesses complete new vendor packets, which should include items such as a personal/business information sheet, contract, and the W-9.
What If You Don't Have It?
If for some reason you do not have an EIN, you still are required to complete the 1099-MISC form if you meet the filing threshold of paying $600 within a year. Turbotax advises making a formal request to the subcontractor for his EIN before the end of the tax year in question. If you still don't have the EIN by the deadline to file the 1099-MISC, leave the identification number box empty, but still submit the report to the IRS.
The IRS will send a notice stating that the number is missing, and this must be sent along with a backup withholding notice and W-9 form to the subcontractor. This notifies the subcontractor that he will be subject to withholding until he submits his identification number.
While the individual or business can be subject to a penalty for refusing to provide an EIN, you also can be subject to a penalty for not submitting fully completed forms by the deadline.
What is an EIN?
The IRS defines an EIN as a “Federal Tax Identification Number, [that] is used to identify a business entity. Generally, businesses need an EIN.” In simpler terms, consider an EIN to be a substitute for a contractor’s or business’ social security number. It is a unique number assigned to these individuals and businesses for identification purposes.
What Are the Penalties for Not Filing a 1099?
Small businesses can be fined $50 per late 1099 if filed within 30 days of the due date. If it's more than 30 days late but submitted by Aug. 1, the penalty is $100 per 1099. If it is later than Aug. 1, the penalty increases to $260 per 1099, and completely disregarding the forms can result in fines of $530 per 1099.