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I have a small company and am having another US based LLC (really just a single guy) do a fairly significant amount of work for me. Do I need a W9 filled out from him?

edit --------
a couple of other issues not in original post (I guess costs aren't that significant):
1. he's doing software development and part of what he is selling is a software package that costs ~5k
2. there's prop about ~5k worth of costs for integration with current system

In that scenario, it seems like I'm writing a check to his LLC for software and another check for consulting services. Do I really need to do 1099 / W9 or is it just a deduction for me? Like I don't give Adobe a W9 if I buy photoshop.

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Yes, W9 if he's a US citizen, and you're going to pay him more than $600. Then you'll use it to prepare a 1099 to send him at tax time (prior to 1/31). Have him fill it out, then keep it on file, if you are audited, they'll ask for this to validate your expenses to him.

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Hey Carson, welcome to answers.onstartups, and thanks for the answer! – Joel Spolsky♦ Apr 15 '11 at 0:40

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