Q: Can 1099 payments made to my SSN be deposited in my Single Member LLC's bank account ?
I just opened a single member LLC and got a contract as 1099 independent consultant. In my W9 form, I shared both SSN and EIN to the company.
I want to know if teh company decides to use my SSN to make 1099 payments to me and issues me a 1099 form with my SSN at the end of teh year, can I ask the company to make direct deposit for those 1099 payments directly in my Single member LLC's bank account as I understand from tax perspectives both SSN and EIN for single member LLCs are linked and treated the same by IRS.
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A:
Yes, you can have 1099 payments made to your SSN deposited into your Single Member LLC's bank account. The IRS allows this because, for tax purposes, a Single Member LLC is treated as a disregarded entity, meaning the LLC and the individual owner are considered the same entity. This means that income reported under your SSN can be deposited into your LLC's account.
However, it’s important to communicate clearly with the company making the payments. Inform them of your preference for direct deposit into the LLC's bank account to avoid any confusion. Ensure that all documentation, such as the W9 form, reflects this arrangement.
Maintaining accurate records is crucial for bookkeeping and tax purposes. Track all payments made to your SSN and deposited into your LLC's account to simplify end-of-year tax reporting. This practice will help you manage your business finances efficiently.
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