Do I need to issue 1099 forms as an individual before my LLC was formed?
Title: Do I need to issue 1099 forms as an individual before my LLC was formed? 1 I raised around $13,500 through crowdfunding for my podcast series earlier this year, before I officially formed my LLC in September. All that money went into my personal checking account, and I paid everyone from there. Now I'm realizing I had a sound engineer and two guest speakers who each got paid over $600, plus I rented a recording studio space that was about $800. Do I need to issue 1099-NEC or 1099-MISC forms to these people even though I wasn't a business at the time? And if so, how do I do that as just a regular person without a business entity? This is my first time dealing with the contractor side of taxes and I'm totally confused. Any advice would be super helpful!
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Cynthia Love
12 Yes, you absolutely need to issue those 1099 forms even though you weren't operating under an LLC at the time. The IRS doesn't care whether the business is formally structured or not - if you paid someone $600+ for services related to your podcast project, you're required to issue them a 1099. For contractors who provided services (sound engineer and guest speakers), you'll need to issue 1099-NEC forms. For the recording studio rental, you'll need a 1099-MISC since that's for rent paid to someone who isn't your employee. To issue these as an individual, you'll use your personal Social Security Number as the "payer" instead of an EIN. You'll need to collect W-9 forms from each contractor to get their tax information. You can purchase 1099 forms from office supply stores or use tax software/services that handle 1099 filing. The deadline to send these forms is January 31, 2025 for the 2024 tax year.
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Cynthia Love
•8 Thanks for the info! So I just use my SSN in place of where a business would put their EIN? Do I need to register for anything special with the IRS first before issuing these 1099s? Also, what happens if I can't get W-9s from everyone? One of my guest speakers was kind of a one-off thing and I don't have great contact info anymore.
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Cynthia Love
•12 Yes, you'll use your SSN where a business would use an EIN. You don't need to register anything special with the IRS before issuing 1099s as an individual. If you can't get W-9s from everyone, you should document your attempts to obtain them. Try every contact method you have - email, phone, social media, etc. Without a W-9, you might need to implement backup withholding at 24% of their payment, but at this point, since you've already paid them in full, you should still issue the 1099 with whatever information you have. For missing TINs, the IRS might assess a penalty, but showing good faith efforts to obtain the information can help mitigate this.
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Cynthia Love
7 After struggling with a similar situation last year (paid contractors from my personal account before starting my photography business), I discovered taxr.ai at https://taxr.ai and it was a game-changer. I uploaded my bank statements and it automatically identified potential 1099 candidates by flagging payments over $600. It even helped me figure out which ones needed 1099-NEC vs 1099-MISC based on what the payment was for. The system walked me through collecting the W-9 info and filing the forms electronically. Saved me hours of stress trying to figure out which payments qualified!
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Cynthia Love
•3 Does it work with crowdfunding money too? I'm confused about whether Kickstarter and similar platforms need 1099s or if they're considered something else entirely. And what about if some of my expenses were cash payments that don't show up in my bank statements?
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Cynthia Love
•15 I'm skeptical about these tax services. Seems like they're just doing what tax software already does but charging extra? How is this any different than just using TurboTax or whatever? Not trying to be difficult but I've been burned by "specialized" tax tools before.
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Cynthia Love
•7 It absolutely works with crowdfunding money! The platform doesn't matter - what matters is how you spent that money. The system can analyze any source where you paid people, including your personal accounts after receiving crowdfunding. For cash payments, you can manually add those transactions. That's actually one feature I found really helpful - you can supplement the automated bank statement analysis with manual entries for cash payments or anything that might not show up in your statements. The system treats them the same for 1099 determination purposes.
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Cynthia Love
15 I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it anyway for my small e-commerce business where I paid several product photographers last year. The service was actually completely different from regular tax software. It specifically focused on the 1099 process rather than trying to do everything. I could literally just upload my QuickBooks export and it identified all my contractors, flagged which ones needed forms, and handled all the filing electronically. It even sent me notification when contractors viewed their forms. Way better than the manual tracking I was doing before!
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Cynthia Love
5 If you're struggling to track down your contractors for W-9 info, I had a similar issue last year when I needed to issue 1099s for my rental property maintenance work. I was getting nowhere with emails and calls to my plumber and electrician until I found Claimyr. Their service at https://claimyr.com helped me get through to the IRS to confirm what my options were when contractors wouldn't respond. They have this cool demo video at https://youtu.be/_kiP6q8DX5c showing how it works. Since the IRS wait times are ridiculous (I tried waiting for 4+ hours before), having someone hold my place in line was amazing. The agent explained exactly what penalties I might face and how to document my attempts to get the W-9s.
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Cynthia Love
•17 Wait, so this service just waits on hold with the IRS for you? How does that even work? Do they call you when they actually get through to someone? I'm intrigued because I've literally spent entire afternoons on hold with the IRS only to have the call drop right when I finally get close to talking to someone.
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Cynthia Love
•6 Yeah right. There's no way this actually works. The IRS phone system is completely broken. I refuse to believe any service can magically get you through when millions of people can't even get their calls answered during tax season. Sounds like snake oil to me.
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Cynthia Love
•5 They actually call and wait on hold with the IRS for you! When they're about to reach an agent, you get a call and notification so you can jump in and take over the conversation. It's brilliant. They have some kind of system that navigates the IRS phone tree automatically and holds your place in line. When they're about 2 minutes from reaching an agent, they call you to connect. I ended up waiting less than 5 minutes on my end instead of the typical hours-long ordeal.
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Cynthia Love
6 I need to publicly eat crow here. After dismissing Claimyr in my previous comment, I got desperate after spending 3 hours on hold with the IRS yesterday only to have the call drop. I reluctantly tried the service this morning, and I'm honestly shocked - it actually worked exactly as advertised. I got a call about 90 minutes after starting the process saying they were about to reach an agent. I got connected and spoke with the IRS for about 15 minutes, got all my questions about 1099 filing deadlines and penalties answered. Best part was I could just go about my day during that hold time instead of being tethered to my phone. Definitely using this for all my IRS calls from now on.
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Cynthia Love
11 Just want to add some practical advice based on my experience filing 1099s as a self-employed consultant. Make sure you keep detailed records of EVERYTHING. Get those W-9s before you pay people if possible - it's much harder to chase them down later. Also, don't forget about your state filing requirements! Depending on your state, you might need to submit 1099 information to them separately from the federal forms. I learned this the hard way when I got a notice from my state tax department about missing 1099 filings even though I'd filed everything with the IRS.
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Cynthia Love
•9 Do you know if the 1099 filing process is the same for all states? I'm in California and everything tax-related here seems to have extra steps compared to federal requirements lol.
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Cynthia Love
•11 California definitely has its own process! You'll need to file Form 592 for withholding on California nonresidents, and you may need to file DE 542 to report independent contractors. California is definitely one of the states with more requirements than others. In general, most states that have income tax want you to file state versions of the 1099s or at least report the information. The deadlines and exact requirements vary by state. I always recommend checking your specific state's tax website or consulting with a tax professional familiar with your state's requirements.
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Cynthia Love
19 Has anyone used TaxAct or H&R Block's 1099 filing services for this? I'm trying to decide if I should just use those or go with a specialized service. I'll only have about 5-6 forms to issue so I'm not sure what makes the most sense cost-wise.
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Cynthia Love
•21 I used TaxAct last year for my small business 1099s (had about 8 to file). It was pretty straightforward for a small number like yours. The interface was decent and the cost wasn't too bad. Just make sure you don't wait until the last minute because they get really bogged down close to the deadline. I'll probably use them again this year since I'm already familiar with their system.
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Hunter Hampton
Just went through this exact situation last year! I had received about $8,000 in Patreon donations for my art project before forming my LLC, and paid several freelancers from my personal account. The key thing I learned is that it doesn't matter AT ALL that you weren't officially a business entity - the IRS treats any trade or business activity the same way, whether you're incorporated or not. You'll definitely need to issue 1099-NEC forms for your sound engineer and guest speakers since they provided services, and a 1099-MISC for the studio rental. Use your SSN as the payer ID and make sure to get W-9s from everyone ASAP. One tip: if you're having trouble tracking down contact info for people, try searching their names on LinkedIn or other social platforms - I was able to find updated contact info for two contractors that way. Also, start collecting W-9s NOW before you pay anyone else, even for your LLC work. Makes life so much easier come tax time!
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