Paying individuals

[Levi Gale]

How do you guys go about paying an individual for work performed? For example I know Joe Nobody that does plumbing work, and he does a great job. Can I offer him a side job, if so how do I pay him and account for it all properly? I recently interviewed my first CPA, and they were still selling me and just danced around the questions. I don't blame them though I can understand, but I have two more CPA's to interview before getting a full consultation.

[Steve Babiak]

I still try to get a W9 from incorporated entities, because the W9 specifically states that the entity is exempt from backup withholding. When I see that the entity is incorporated, then I just don't send them a 1099 MISC. And you have to get the W9 and send a 1099 MISC to any LLC (although if the LLC elected Corp taxation they might not need to be given a 1099 MISC - not sure on that).