Start collection W-9s now

Due to new IRS regulations related to W-9s, your business will be required to collect and verify each merchant’s Tax Identification Number (TIN) and the legal business name and address associated with that number for every vendor with which you spend at least $600 per year or more. That means if you spend $600 over the course of the year with an office supply store or on utilities, you will be required to issue them a 1099 Misc form at the end of January 2012 and file it with the IRS for the 2011 tax year. While this may be reversed at some point due to heavy opposition, we recommend you go on the assumption that this will not change. That means you need to start collecting W-9 forms now…before you (and everybody else) is scrambling at the end of the year to comply with regulations for issuing 1099s. Laborde & Associates suggests each time you pay a merchant, you automatically ask for or send a W-9 form and collect them as you go through the year. At the end of the year, weed out those with whom you spent less than $600. We suspect that at some point this year, larger organizations, such as banks and big box retailers, will likely post these forms to their websites for download. One added note: after collecting the W-9, be sure to run the tax ID number through the IRS TIN matching program, as there will be penalties assessed if the number and organization name don’t match what the IRS has on file. You can access that information here: http://www.irs.gov/govt/tribes/article/0,,id=131207,00.html