We have a vendor whose W-9 indicates they are an LLC (limited liability company) ...

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Q. (cont.) ... but specified "S" as their tax classification. This vendor provides a service; should we 1099 them as miscellaneous income?

A. This is a common inquiry.

LLCs whose tax categories are that of C or S corporations are not reportable unless they are attorney practices or providers of medical services. Attorneys and medical services are the two exceptions to the corporate exemption, and you must report such payments if $600 or more.

But otherwise payments to a corporation (C or S) are exempt from reporting.

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