Why Insurance company's request your tax id number!!!!

Me and another roofer are arguring about this question?

When you are hired to do a roof and the insurance company is paying and not the homeowner because the damages were caused by a natural disaster. Why does the insurance company want the contractor to fill out a request for taxpayer identification Number and Certification Form.

If you are charging 20,000.00 to complete the roof and the insurance company pays you that much doesnt the insurance company report that they paid you that much money ti IRS and then you will have to pay taxes on all of it (or the profit).

This other roofer is saying because he did not charge the homeowner any taxes he does not have to pay any taxes to Irs.

What is your take on this? I need to know how this works and why they request your tax id # and what they do with it.

Your response to this question is greatly appreciated.>>>

If the check is made out to your company, they will send you a form 1099. It requires a ID #>>>

But does taxes have to be paid>>>

"...doesnt the insurance company report that they paid you that much money ti IRS and then you will have to pay taxes on all of it (or the profit). "

Absolutely. All receipts have to be reported.

"...he did not charge the homeowner any taxes he does not have to pay any taxes to Irs"

Unless he is referring to collecting and transmitting sales tax, something that is usually due the state, (not the IRS) he is a bit confused to say the least.

Sit down with an accountant and make sure all y'all have it straight.>>>

Let me guess, the other roofer lives in his van and has a kickin' bong collection.>>>

msshottet Said: Me and another roofer are arguring about this question?

When you are hired to do a roof and the insurance company is paying and not the homeowner because the damages were caused by a natural disaster. Why does the insurance company want the contractor to fill out a request for taxpayer identification Number and Certification Form.

If you are charging 20,000.00 to complete the roof and the insurance company pays you that much doesnt the insurance company report that they paid you that much money ti IRS and then you will have to pay taxes on all of it (or the profit).

This other roofer is saying because he did not charge the homeowner any taxes he does not have to pay any taxes to Irs.

What is your take on this? I need to know how this works and why they request your tax id # and what they do with it.

Your response to this question is greatly appreciated.

You are at that point in time, if the check is being made out directly to your company, or even if it is being made Dual Party, To the Home Owners Names ans Your Company's Name, then you are considered a vendor.

They must have your Tax ID information to be able to send out the check to you, because at that time they are responsible to reporting that payment and to whom, to the IRS at the end of their fiscal year.

Yes, it is income to your company, so the profits from that revenue must be reported on your taxes as such and you should get taxed on it.

To do otherwise would be a very severe fraudulent cheating on your taxes.

Are you concerned because you felt that the money should just get cashed an put into a secret bank account or just cashed at the home owners bank and allow the funds to go unreported to the IRS?

At the end of the year, your company and the IRS will receive a copy of the 1099 form, which shows how much that they paid to you and rightfully so, because even if they did not report that payment to you to the IRS, you would still be responsible for including the amount on your tax return.

Ed >>>

What does your accountant say?

I know that regardless of weather your company receives a 1099, you must pay taxes. Report your gross. Deduct your expenses. Pay taxes on your profits like every other law abiding citizen in this country.>>>

Man I must be getting cranky in my old age. You guys sure have a lot more tolerance than I do when it comes to questions like this from someone who obiviously has no clue as to what they are doing.>>>

...................no man, I'm the same way.....just keeping my mouth shut, for a change..>>>

Yes please, keep your mouth's shut and keep your cranky ness to yourself. Your old I am young, obviously you have a lot more experience than I do. and as for you roofrite you never have anything good to say so you should keep all your comments to yourself. You remind me of my know it all high school teachers that acts like you cant ask them anything. I am asking anyone that is willing to answer!!!!

The only person that answers questions without an attitude and also give full details and has patience is ed the roofer. Thanks I appreciate it. My quetion has been answered.>>>

LOL........You got ballz, I like that....>>>

I agree Jed. (but now my feelings are all hurt and stuff...Ed is the picture of patience and deserves the credit given re: the vendor requirement...BUT!!! Grrr! the ignorant other guy is almost certainly confusing gross rec'ts reporting with sales tax reporting so I'm going to sulk in the corner until somebody at least offers me 50% credit for trying to answer without having an 'attitude.' :S )>>>

This question makes me really wonder how you would have got licensed in florida as this is a very basic part of being in business.>>>

To get a state license in florida you have to understand business law and have some knowledge of it to pass the state test, to ask such a question on here shows your inexperience and to say your trying to gain information on here would indicate you wont be in business long.>>>

The other roofer would be refering to sales tax which we dont charge here for home improvement, but if you do you turn it over to your your local tax man.>>>

You pay the sales tax when you buy the materials, so that has been paid. If you do the roof for 20,000.00 and your costs are $22,000.00 at the end of the year it will go down as a loss of $2,000.00. If it costs you $15,000.00, you will have a gross profit of $5,000.00. You need to take of the business decuctions from this at the end of the year, so who knows how much money you will make.

If you take the check and cash it and don't pay anyone, you can make a lot of maney. It will not last very long however, because the material suppliers and the workers will not be fooled twice! good luck.>>>