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I have 40 Contractors and I have no Clue how to pay them

Discussion in 'Business & Tax Advice' started by StealNova, Dec 27, 2013.

  1. StealNova

    StealNova Newbie

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    Occupation:
    CEO of StealNova, LLC
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    My Website makes on average $5000 a day and right now I have 40 "contractors" (I like to call them) And what they are doing is using their social media power (from facebook) And I give them a percent of their earnings.

    Half are from the US and half are from foreign countries (India, UK, Brazil, ect.).

    My issue is I have no clue how to pay them. I've been to 2 different Accountants and have gotten conflicting information. My money is made via ad revenue. What I have been doing thus far is collecting W9's from the US contractors and paying everyone by the month.

    When I file for taxes, do I absolutely NEED W9's from US people? Thats what my accountants said but I wish there was a way around it. A few of my contracters refused to give me W9's and I don't know if that's bad (Do I get in trouble with the IRS for that?). I havn't been getting any type of form from the foreign contractors because my 1 accountant said I didn't need them, all I had to do was send them 1099's at the end of the year.

    Any word of advice of what to do?
     
  2. Danny1111

    Danny1111 Elite Member

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    I'm surprised your accountants seem confused.

    i would have thought you could have sent 1099 to US people and nothing to non US people ... There must be more to the story though.
     
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  3. absinthekid1

    absinthekid1 Junior Member

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    I would personally get the w9s. They're independent contractors and could be helpful to have if you get audited and they want proof that the people you're sending the cash to are legit.
     
  4. Beven

    Beven Elite Member

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    I'm surprised you're asking for advice from an online forum instead of getting more help from your accountants..
     
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  5. Numbuh362

    Numbuh362 Elite Member

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    Lol, exactly. Why are you paying the accountant?
     
  6. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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  7. IamNRE

    IamNRE Jr. VIP Jr. VIP Premium Member

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    You make your money from ads?

    Use a script / plugin that can rotate the ads so everyone gets xx impressions split equally.
     
  8. kvmcable

    kvmcable Supreme Member

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    Send the people the W-9s and if they don't return then then stop paying them would be my advice. I've been down this road and it cost me a ton of money. You must file a 1099 on anyone you pay cash to over $600 a year. Of course you can't file a 1099 on someone if you don't have their information. So what the IRS does is makes all that expense (money you gave to contractors you failed to submit 1099s on) your income and you get to pay the tax on it, typically with penalty and interest. Your accountant knows this and is giving you good advice. I suggest you follow his advice. If someone from the States refuses to return the W-9 then stop paying them or tell them you're withholding 30% for their taxes. Being lax on this rule cost me $110,000 in back taxes over a 6 year period. Now I don't pay anyone that doesn't think they need to pay their own damn taxes. No W-9, no payment. It made me sick to pay all those SOB's taxes that I did a "favor" for by not reporting.
     
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  9. liftitbuddy

    liftitbuddy Newbie

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    KVM hit it on the head. I am an attorney and Certified Public Accountant. Filing a 1099 is a requirement for anyone you pay over $600. Failure to file can result in penalties and interest. If they refuse to provide W-9 information, and/or you fail to file 1099s (or w-2s for employees) you put yourself at risk with the IRS. I would be happy to discuss with you in greater detail outside of a public forum.

    --
    The information/answer is not, nor is it intended to be, legal advice. Consult an attorney regarding your individual situation. This attorney is only licensed to practice law in Illinois. Your question and this answer do not create an attorney-client relationship. Do not send/post any confidential information.