One of the first concerns of the new year for any business owner is sending tax forms to employees and independent contractors and filing them with the IRS. Small businesses with employees must provide W-2s to all employees, whether full-time or part-time. Businesses using the services of businesses and individuals as independent contractors must provide Forms 1099 to all applicable entities. A limited partnership is one of the applicable entities.
The IRS requires that individuals and businesses file various 1099s for payments and transactions that occur during the course of business. You must issue the most common form, 1099-MISC, for income paid in excess of $600 for services rendered. This includes payments to attorneys, accountants, consultants and representatives. The IRS specifically states in the instructions for the form that 1099 filings are generally required for all payments made to partnerships. This includes limited partnerships.
Although Form 1099-MISC, Miscellaneous Income, may be the most well known, you may also need to provide other 1099 forms to limited partnerships. If a limited partnership had an outstanding loan or debt obligation which you canceled during the tax year, you will need to file a 1099-C to report that debt cancellation if the amount exceeded $600. If you entered into a barter transaction directly with a limited partnership, you must report that transaction on Form 1099-B regardless of the transaction amount.
You must file all types of 1099 with the IRS by February 28 of the year following the concluded tax year. However, if you file electronically, the IRS extends the due date for filing to March 31, or the next business day if the 31st falls on a weekend. The IRS requires you to issue 1099-MISCs by January 31. You must also send 1099-Cs by January 31. You have more time to issue 1099-Bs; the due date for these is February 15.
To file 1099s for limited partnerships you will need to document the LP's name, address and EIN -- employee identification number. Thus, you will need to request that each LP with which you do business complete and sign a Form W-9, Request for Taxpayer Identification Number and Certification. By signing, the LP's authorized representative certifies that the information therein is true. You will use the information from the W-9 and from your accounting records to issue the 1099s.