We ask W-9 forms from contractors so we can get their information and we keep that so later, we can give them an IRS 1099 form (IRS stands for Internal Revenue Service). If contractors are paid more than $600, we are obligated to send 1099 form to contractors and to IRS. If less than $600, no need to send 1099 form to contractors and IRS.
Every January, we calculate total amount paid to instructors in the previous calendar year. Contractors do not include corporation or a business.
Instructors are contractors.
Some studio owners are contractors, some are not. If a studio Karin of D Dance Studio said she's not a corporation and just a DBA, so we will have to calculate also how much we paid her.
Other studios in Vegas or elsewhere maybe the same case.
Another IRS requirement is W-2, which is the form we need from employees. Movers and Shakers only have a single employee registered (which is Danny himself), as a legal requirement. Everybody else is a contractor.
The contractors will need to get the exact amount they received from us, and also a copy of 1099 forms. If we fail to do this, they will not be able to file their own taxes on time. 1099's for calendar tax year are due January 31st of the following year. Our 1099s are processed by accounting firm HR Block.
Refer to below steps to file 1099s of contractors.
Step 1. Get the partner's W-9 forms
Step 2. Calculate the total payments for the year
Step 3. Inform the total payment amount to the partner
Step 4. Forward all W-9 forms to HR Block, third-party accounting service