If you are a U.S. based employer hiring a Service provider who is U.S. Person as defined by the Internal Revenue Service (IRS), you may need to submit 1099 tax form to the IRS at the end of the tax year.
What is 1099 Form?
The 1099 Form, also known as 1099-Miscellaneous Income Form or 
Information Return, is a U.S. Internal Revenue Service tax form, which is issued to U.S. based independent contractors, who have worked for an individual client and earned more than 600 USD in a calendar year.
What information does 1099 Form contain?
• Professional’s name and address
• Professional’s social security or tax ID number
• Payer’s name, address, and telephone number
• Payer’s federal ID number (EIN)
• Amount of non-employee compensation
Who is a U.S person?
• An individual, who is a citizen or resident of the United States
• A partnership, company, or association created in the United States or under the laws of the United States, or
• Any estate (other than a foreign estate) or trust.
How LimeExchange helps you?
We understand the importance of filing the 1099 tax form for it is mandatory as per U.S. tax laws. We encourage all our U.S. based buyers to start opting for 1099 service as the IRS can impose penalties on you if you pay a service provider US $600 or more in a financial year and do not file 1099 with the IRS. It is the buyer’s responsibility to file 1099 Form, and not the service provider’s. You may also be subject to a penalty of up to US $50 per information return that is filed without the required information.
We, at LimeExchange, offer 1099 Tax Form service to Buyers absolutely free of cost. If you are a buyer, who pays a minimum of US $600 to a U.S. based service provider for his services during a financial year, you are required to opt for 1099 service while posting your project.
Every Year in January, we will issue this form to the service provider and the IRS for the payments made by you during the previous financial year. Apart from that, you will also get a consolidated receipt for all the 1099 Tax Forms that we issued on your behalf. 
To file this, a buyer needs the correct taxpayer identification number (TIN) of the service provider to report any amount paid to the service provider by him. LimeExchange gives this information to the buyer by asking for W9 Form from the service provider, which is a request for Taxpayer Identification Number and Certification.
We recommend that you choose 1009 service even when you are paying less than $600 to a service provider as during the course of financial year you may hire the service provider again and probably pay more than $600. Selecting 1009 service for every job posted is a no cost way to save headaches down the road.
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