[REQUEST] Data recovery partner asking for my SS#
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dgoglio
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It is not uncommon for a company to request your SSN or EIN on a 1099 if they pay you a comission.
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Markverhyden
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This is completely correct. Technically if you are paid more than $600 per year they have to have that. But I've seen requests from some that are below that level. No problem.
lcoughey
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Paying commissions is a pain. This is why we prefer to give discounts to resellers. It is also better for you to outsource, too.
1. You get a discount and can mark up as much as you want
2. You keep your client. When you tell the client to ship to a specific lab, they tend to just walk out your door and go to yourr competitor. I get clients coming in stating that they were referred by several computer techs because they were trying to find someone local.
3. Most labs who pay commissions tend to charge insanely high rates. This results in fewer clients getting their data recovered.
1. You get a discount and can mark up as much as you want
2. You keep your client. When you tell the client to ship to a specific lab, they tend to just walk out your door and go to yourr competitor. I get clients coming in stating that they were referred by several computer techs because they were trying to find someone local.
3. Most labs who pay commissions tend to charge insanely high rates. This results in fewer clients getting their data recovered.
At this stage of my life I'm not taking on new services, I don't feel confident enough in doing it, I do just the basic software recovery. Wish I had gotten into it years ago, but our market is pretty saturated now with recovery specialists and with so many backing up to the cloud I don't think the hardware investment would be worth it either for me.
nlinecomputers
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that's a good idea, I faxed the form back with only my last four ss numbers on it because one of the reps said thats all i needed, but another said no They needed the full number, so I guess I'll see if I hear back from them again.
nlinecomputers
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They require the full number. The IRS uses this info to track money paid to you.
pcpete
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I think you misunderstood Luke. He was saying process the data recovery yourself by working with your client directly and sending it to him or some other quality low price data recovery specialist, then mark it up. We work with a company who charges 300 to 600 per recovery average and we then mark it up $500 to $600 dollars. We do not get a lot, but maybe 4 jobs a year for an extra $2000 to $2500 in profit. It is kind of a pain, but if we shoot to make at lease $500 per recovery it is worth the hassle.
lcoughey
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Exactly. When you have a client come in your doors and you turn them away by recommending that they contact a data recovery lab, you are turning down a hot lead for a client who clearly needs assistance with backups, a replacement hard drive and possibly other computer service work. But, that is okay, because your competitor up the street will gladly provide them with those services.
Furthermore, I get clients who come here who were first referred to places like DriveSavers and Ontrack, but were completely overwhelmed with their high pressure sales and pricing. Some go back to their computer shop to let them know about us. Others ask if we have another computer shop we would recommend.
Your PCMD
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Don't give out your SSN. Instead, give them your EIN. If you dont have one, you can easily apply for it online. The reason why I never give my SNN but instead my EIN is that I do a lot of 1099's (54 this year) and a fair bit of those are from small businesses and many of them are no longer in business or have sold it off to someone else whom I don't know and I just don't trust them.
I'm in arguments right now with a small Hotel over a $725 invoice (which they paid) and the manager refuse's to take my EIN 1099 form but insists on my SSN. Needless to say, it's not going to end well for them. The management at this hotel has changed at least 5 times last year so my trust in that place is non-existent.
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britechguy
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Do you all mean a 1099 or a W9? [This is just for clarity. I have to file a W9 with companies that pay me where I work for them as a contractor. The 1099 is what they send me at the end of the year documenting what I've been paid.]
And I agree that it is not uncommon at all to have those with whom one has an ongoing relationship, but where one is not an employee, to have to file a W9 either with one's SSN or FEIN. If you've acquired the latter that will generally be accepted (and it ends up linking back to your SSN behind the scenes if you are a sole proprietorship).
Addendum: Apologies to ell, as I somehow breezed past my initial question having been brought up, and resolved, already.
Also, I have had to file W9s with companies where I only worked for them one time as well if their bean counters/accounting department were responsible for making the payment. As someone else has already said, this is for reporting to the IRS.
Your PCMD
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Wait, what? A W9 is for employees of a company and since your not an employee you technically do not need to fill a W9 out. Also, for your clients, you should stress that you are not a contractor but a vendor. Every business I do work for has me listed as a vendor. I have never once in all my years in business been asked or mandated to fill out a W9.
Note, a W9 is for an attempt of a business to possibly receive a government tax break.
nlinecomputers
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Ok you’re flat wrong you are thinking of a w4. A W9 is used by someone who expects to receive 1099. If I pay you more than $600 for labor services I have to issue you a 1099. You give me a W9 so that I have the correct information such as your SS#, EIN,or TIN. And you don’t have to fill out the form you can send me the proper information. The form exists so that you know what information I need.
https://turbotax.intuit.com/tax-tips/self-employment-taxes/what-is-irs-form-w-9/L2f51WOD7
britechguy
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@nlinecomputers: +1
Knowing your forms, and what each is for, is important. I've had to file a W9 as a vendor for the Commonwealth of Virginia ever since I became one, and it has to be refiled once every several years, but they nag me for a new copy.
Knowing your forms, and what each is for, is important. I've had to file a W9 as a vendor for the Commonwealth of Virginia ever since I became one, and it has to be refiled once every several years, but they nag me for a new copy.
nlinecomputers
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I’ve had plenty of my clients send me 1099s. Your correct that I'm a vendor and they shouldn’t do it but I'm not going to argue with clients about it.
britechguy
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Well, the Commonwealth of Virginia always sends me a 1099 every year. Otherwise I'd have no idea of what their total payments to me were (or at least wouldn't without slogging through a lot of records to add it up). Since their business comes to me via their own channel, and all monies are direct deposited, that 1099 is a godsend to me.
nlinecomputers
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Really? I can pull up on Quickbooks that info on any client in seconds.
britechguy
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Just like Einstein once said not to bother writing down phone numbers because you can look them up, my own record keeping reflects what I know will come in, from whom. I don't log things I know will be presented to me, in the form I need to use, and that will have been presented to the IRS in the same way. Since I can rely on this, I do.
Each to his or her own preferences for record keeping.
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