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Video instructions and help with filling out and completing Which Form 5495 Withholding

Instructions and Help about Which Form 5495 Withholding

Even if you're working with independent contractors and you're filing Form 1099 at the end of the year like you're supposed to, it's possible that you'll need to withhold on the compensation that you're paying to them. If you're paying rents, non-employee compensation for services, royalties, or any other amount as reported on Form 1099-MISC for miscellaneous income, generally you'll need to get the payee's taxpayer identification number. You can do this either when the payee opens an account or when the transaction occurs. To do this, you deliver Form W-9, which is a request for a taxpayer identification number, to the payee. If the payee does not give you a taxpayer identification number or gives you a taxpayer identification number that is obviously incorrect (such as not having exactly nine digits or containing non-numeric characters), you should begin backup withholding immediately. At least once a year, you should also request a correct taxpayer identification number from the payee. If the payee provides you with a number that appears to be correct, then backup withholding is not required. However, remember to file Form 1099-MISC for the total amount paid during the year, if it's required. If the information on the Form 1099-MISC that you file doesn't match the IRS records, they may send you one of two notices: a CP 2100 or a CP 2100A. These notices include a list of potentially missing or incorrect taxpayer identification numbers. Essentially, this means that the name and taxpayer identification number don't match what's on the IRS's master file, or the taxpayer identification number cannot be found in the IRS's master files. The notice will also provide you with instructions on how to correct your records or start backup withholding. If you receive one of these notices, you should follow its instructions by...