contract-law tax-law
My company has contract work with another company - Do I need a 1099 or other tax form?
<p>My small business has a contract with another business to perform services as independent contractors.</p>

<p>Here's the legal part of the contract spelling out the relationship between my company and the client:</p>

<blockquote>
  <p>The parties are independent Contractors and nothing herein shall be
  deemed to create an agency, joint venture, employer-employee or
  partnership between them or with any of their personnel. [My company]
  will not be eligible to participate in any vacation, group medical or
  life insurance, disability, profit sharing or retirement benefits or
  any other fringe benefits or benefit plans offered by the Client to
  its employees, and the Client will not be responsible for withholding
  or paying any income, payroll, Social Security or other federal, state
  or local taxes, making any insurance contributions, including
  unemployment or disability, or obtaining worker's compensation
  insurance on [My company's] behalf. [My company] shall be responsible for,
  and shall indemnify the Client against, all such taxes or
  contributions, including penalties and interest</p>
</blockquote>

<p>I met with a "Client Relationship Manager" at a CPA firm for a free consultation, and she mentioned that I may need to get a 1099 from them. This struck me as odd, and I call out the person's title because they are <em>not</em> a CPA, just a manager who knows stuff about accounting (apparently at this firm, CPA's are too important for free consultations -<em>sarcasm</em> )</p>

<p>I was under the assumption that my company would just be invoicing the client the agreed upon amount at an agreed upon interval, and I would simply withhold taxes/benefits/etc, and that's the end of the story.</p>

<p>However, that manager's comment got me thinking about corp-to-corp forms, and 1099's. Do I need to worry about getting a 1099 or a corp-to-corp from my client? Are there other tax forms that are typical to get from a client?</p>

<p><em>Note: I'm in the process of finding a CPA, but until then I'd like some insight on this matter.</em></p>

<p>Normally, payments between entities other than Corporations of more than $600 need to be reported to the IRS using form 1099-MISC.  This is the obligation of the payer, not the payee.  You should expect the company paying yours to request a <a href="https://www.irs.gov/uac/About-Form-W9" rel="nofollow">Form W-9</a> from you at some point, and then by February 16 of the next year you should expect to receive a <a href="https://www.irs.gov/uac/About-Form-1099MISC" rel="nofollow">1099-MISC</a> declaring all the money they paid you.</p>

<p>Regardless of whether they report it (not everyone does this correctly ... or on time), you are legally obligated to include payments received in your business taxes.</p>
