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ninsights
October 13, 2023
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Paying a Contractor in Product Instead of Cash

  • October 13, 2023
  • 1 reply
  • 0 views

A Texas retail company is an LLC. They would like to contract an independent person (not an employee) to perform adhoc work such as covering for the one employee when the employee is on vacation and also to occasionally perform some data entry work. The independent contractor has requested to be paid on product (the store sells dresses) instead of cash.

Question: If the company pays the person in product instead of cash and that value exceeds $600 during the calendar year, does the company need to send a 1099 to the independent person and if so, which 1099 form?

Thank you for any assistance provided.

Best answer by Rustler

Yes, and you use the 1099-NEC

You also need the contrator to fill out and sign a form W-9, downloadable form from the IRS. The W-9 provides you with his tax number and prevents him from skating out at the year end, keep it onfile.

 

 

1 reply

Rustler
RustlerAnswer
October 13, 2023

Yes, and you use the 1099-NEC

You also need the contrator to fill out and sign a form W-9, downloadable form from the IRS. The W-9 provides you with his tax number and prevents him from skating out at the year end, keep it onfile.

 

 

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