Discussion:Consumer Questions about 1099-MISC

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Discussion Forum Index --> Consumer Questions --> Consumer Questions about 1099-MISC


Trillium (talk|edits) said:

19 January 2009
Moving a series of consumer questions out of four separate discussions on the professional tax forum: "Who gets 1099-MISC" and "1099-Misc" along with "1099 Mistake" and "1099-Misc and form 4137" (which I won't link to, since these questions are such that they will stand alone without the back history of those discussions). Each discussion's posts will be grouped together, so the dates from top to bottom will not be in strictly chronological order. There are no outstanding questions from any of these discussions.


Jet1975 (talk|edits) said:

25 January 2007
So do LLC's get a 1099?

JR1 (talk|edits) said:

January 25, 2007
yep

Jet1975 (talk|edits) said:

25 January 2007
For example, we dealt with a tresury management consulting company. I believe it is a single member LLC. They provided $12k of consulting services. Would I 1099 them. The owner insists that she should not receive a 1099.

Glmpllc (talk|edits) said:

25 January 2007
Jet1975...check the W-9, it's possible that it's an LLC which elected to be taxable as a corp. If so, no 1099 in my opinion. If it's the more common disregarded entity, then it gets a 1099.

Lhhesscpa (talk|edits) said:

25 January 2007
LLC is the abbreviation for Limited Liability Company. An LLC is a legal entity created under state law. A corporation is separate kind of legal entity. I think 1099s should be sent to LLCs. The fact that an LLC has elected to be treated as a corporation for tax purposes doesn't change the legal nature of the entity. Therefore, I think 1099s are required to be sent to LLCs. -- Larry Hess, CPA, Albuquerque, NM - Talk to me


AP Hotel (talk|edits) said:

25 January 2006
I am trying to learn this all by tomorrow and I am confused. I was told anyone we pay in excess of 600.00 for the year who is not part of an incorporated company we have to send a 1099 misc to. I was then told by me CFO that it is only independant contractors and individuals that we send stuff to. Can anyone help me? No one here seems to be able to!

DZCPA (talk|edits) said:

25 January 2006
When in doubt.....send it out! You will not get in trouble if you sent one out to an entity who does not require one.

Randymccall (talk|edits) said:

25 January 2007
Can anyone help me with reporting boxes for oil & gas related payments? I am trying to determine where to report lease bonus payments and where to report surface damage payments. I was planning on using Box 2 (Royalties) for the lease bonuses and Box 3 (Other) for the surface damages. 1099-MISC.

Any thoughts?


Vignette (talk|edits) said:

6 February 2007
I run a S corp and have been in business for 4 years. This is the first year that one of my clients sent me a 1099-MISC despite of the fact I checked "Coporation" on my W-9. The TIN on 1099-MISC is my corporation TIN. What should I do with it? Would it cause any problem on my corporate or personal tax return? Thanks a lot.

Glmpllc (talk|edits) said:

6 February 2007
Vignette, assuming you are reporting this income on your 1120S, there is no reason to be concerned. Your return should be prepared based on your books and records; which, if done correctly, contains the income reported to you in the 1099.


Mrs6202 (talk|edits) said:

13 February 2007
I have a question that is maddening to me. Company electronically files 1099's but the CFO refuses to send out recipients copy to them. CFO says that they don't need them as our state does not have income tax? When I insist that it is a clearly stated Fed. law. I really would like some thoughts.

1040man (talk|edits) said:

13 February 2007
It all comes down to the Federal law ... which states: " In the course of your trade or business if you pay an individual other than a Corporation more than $600 , a Form 1099 must be issued to said party."

JR1 (talk|edits) said:

February 13, 2007
But I do tend to agree with the CFO, you don't generally need them. If you report all your income, who cares? Now, that being said, there are exceptions. It's always nice to know that you're reporting more than what IRS gets on 1099's where all your income is on them, due to timing differences, etc, which can create mail that is unnecessary. And I'll say the CFO has a mean streak, figuring he's watching to see who'll get caught not reporting income that he did! That's mean. But you don't need the 1099. They're just trash normally.


Torgusa (talk|edits) said:

4 January 2008
For rent payments, how do I confirm if the vendor is a real estate agent or not?

Bottom Line (talk|edits) said:

5 January 2008
Try your state department of business and professional regulation or licensing bureau.

Rockin (talk|edits) said:

7 January 2008
New question here: Am I right that for 2007, there is no limit (i.e.$600+) of payments to attorneys that must be reported on 1099-Misc?

Also, in the past, I have included court reporters, courts, anything law-related, in the attorneys category, and now I'm wondering if this is correct?

Bottom Line (talk|edits) said:

8 January 2008
The instrustions for Form 1099-MISC says that the term "attorney" includes a law firm or other provider of legal services. The $600 is correct.

Lynnef (talk|edits) said:

10 January 2008
I am preparing 1099s...what about organizations that we make contributions to (eg election funds, cancer society, etc.)? ARe they issued 1099s?

Bottom Line (talk|edits) said:

11 January 2008
No. They should give you a receipt.

Olycraig (talk|edits) said:

11 January 2008
The charitable or political organization is typically a (not-for-profit) corporation, thus you don't need to send them a 1099 for services they provided to you.

Cbaldwin (talk|edits) said:

14 January 2008
I am finding 1099 Misc. very confusing when it comes to who and who does not recieve them. If a Graphic Designer outsources for his printing and some web-design, would both of these vendors be sent a 1099 for their services. I also would like to know about health insurance premiums paid for self and employees and for the rent paid for the studio space, are they included also?

Heather@hdbookkeepers.com (talk|edits) said:

14 January 2008
Ok -With all of teh above said and if I understand clearly- if the entity is a not a corp than we send a 1099? How about Accountants? Bookkeepers?

Bottom Line (talk|edits) said:

15 January 2008
If not a corp, they get a 1099. Attorney's get one even if they are a corp. (Also note that the instructions say that a corp does not HAVE to get a 1099. There is no penalty for issuing one.)

Jdugancpa (talk|edits) said:

15 January 2008
Rockin, I don't believe a court reporter is a provider of legal services. A court reporter merely records and transcribes the statements made in a court of law or a deposition.


Taxseasonagain (talk|edits) said:

17 January 2008
Could anyone tell me if a company purchases merchandise from a vendor such as beer or T-shirts from a vendor if we would send them a 1099-misc form?

Also, We are a non-profit organization. We paid $3000 to to a few celebrity tennis players to put towards their airfare and some expenses while they played at our event. Is that considered reportable income where we would have to send them a 1099-MISC form? The did not submit receipts to us.

Rkthmpsn (talk|edits) said:

17 January 2008
Could anyone tell me if I should send a 1099-MISC to an employee who does outside work for our company on his own time at his house. He does some welding which is outside the scope of his employment description.

TheTinCook (talk|edits) said:

17 January 2008
"Could anyone tell me if a company purchases merchandise from a vendor such as beer or T-shirts from a vendor if we would send them a 1099-misc form?"

Depends if you have a fixed retail establishment.


"Also, We are a non-profit organization. We paid $3000 to to a few celebrity tennis players to put towards their airfare and some expenses while they played at our event. Is that considered reportable income where we would have to send them a 1099-MISC form? The did not submit receipts to us." Yes.


"Could anyone tell me if I should send a 1099-MISC to an employee who does outside work for our company on his own time at his house. He does some welding which is outside the scope of his employment description." Tread very, very carefully here. You have two major concerns here. The IRS and the DOL. The only possible way I would even consider such an arrangment is if the employee met the 20 factor common law IC test for the outside work, and the outside work is wildly unrelated to the normal duties (i.e. an admin assistant getting paid to make a sculpture for the waiting room). Every faint wiff of control over the employee/IC's outside work will turn it back into employee work. This can't be treated as a condition of employment, and no negative action can be taken in against the employee regards to the outside work.

Secondly, for labor law purposes, a wider brush gets used. No matter what the IRS thinks, you could easily find yourself on the hook for FSLA OT and minwage violations. The employee/IC would still likely get WC coverage if he gets hurt during the outside work. The earnings could be included in calculation of any benefit for UI compensation. There might even be ERISA problems if you don't include those earnings with refiguring retirment benefits.

Additionally, I doubt the "IC status" would shield you from torts arising from the outside work.

So treat the employee as an employee for that outside work. Include it in his w-2.


Millerd1116 (talk|edits) said:

17 January 2008
We're having a debate in our office. We know that corporations are exempt, unless it's for payments made to physicians or other providers of health care services. The other people in my office say that payments that we've made to our health insurance company fit this description, and that they should get a 1099. I say that an insurance company does not meet the definition of a 'provider of health care services'. I believe that Congress intended that you would need to touch the patient to be considered a provider of health care services. In fact, the 1099 instructions even specifically exclude payments to pharmacists, which I would maintain are closer to the patient than insurance companies are. Any thoughts?? I have not found any citations that define 'health care service provider'.

Natalie (talk|edits) said:

January 18, 2008
If this question has come up, I have not seen it. What is the definition of "payer" for 1099 purposes? I have a client in the rental business that cuts checks to service providers on behalf of the owners. Who is responsible for filing the 1099s -- the management company or the owner?

Pampychef (talk|edits) said:

18 January 2008
Do you issue S Corp and LLC's 1099's? I'm thinking SCorp is a corp so no, but want to be crystal clear. LLC's I'm really not sure of.

TammyT2000 (talk|edits) said:

18 January 2008
An S Corp is a corporation so you do not issues 1099's to them but you do issues them to LLC's. As stated by others, there is no harm in issuing a 1099 is you are unsure.

TammyT2000 (talk|edits) said:

18 January 2008
An S Corp is a corporation so you do not issue 1099's to them but you do issue them to LLC's. As stated by others, there is no harm in issuing a 1099 if you are unsure.

Blrgcpa (talk|edits) said:

18 January 2008
Corps do not get 1099s. Attorneys get them no matter what business form they use.


Kalderman (talk|edits) said:

21 January 2008
Does anyone know where I can find a list of the states that a payer must send copies of receipients 1099-Misc? I know most states I do not have to send them because of the combined FEderal/STate filing program. But I know there are a few that have to be filed individually to the state. Can anyone help?

JimBlob88 (talk|edits) said:

22 January 2008
Box 6 is confusing me:

If payments to a tax exempt organization are not required to be reported on a 1099, why does the instruction for box 6 specifically mention that only tax exempt hospitals and extended care facilities are exempt? If we pay a tax exempt corporation running a medical clinic or lab for health care, do we issue the 1099 or not? Doesn't the tax exempt organization exemption overide everything else? Would someone please explain?

Db43 (talk|edits) said:

23 January 2008
Can anyone clarify payments to report on 1099-Misc? Example, we have paid $2000 a month rent every month except for December. We paid $1200 in December because we received a $800 utility credit from the landlord. Should we issue them a 1099 for the full $24,000 or the actual paid amount of $23,200?

Thanks

Devildog (talk|edits) said:

24 January 2008
Hello everyone! Our company have "dealers" that are corporations, some LLC'S and sole proprietors who purchase our products for resale. Does the $5,000 (box 9) rule apply to the non-corporation dealers?

Sprello (talk|edits) said:

24 January 2008
My company changed from a sole proprietor to a Corp. in May

Does 1099 need to be issued if the earnings are $400 under each tax id or can the entire earnings be reported on the newest tax id.

JR1 (talk|edits) said:

January 24, 2008
Sprello, no 1099's required.

Db43, I'd issue it for what you paid out actual, leave out the credit. 23200.

Thaonguyen (talk|edits) said:

25 January 2008
New question: is there any document/IRS form available to identify if one entity/individual should be issued a 1099 MISC at year-end when first starting doing business with that entity/individual?

Natalie (talk|edits) said:

January 25, 2008
Thaonguyen, are you thinking about the W9?

Thaonguyen (talk|edits) said:

26 January 2008
yes I am. That's the only form I know up till now to obtain tax ID or SSN of subcontractor. I don't know if it's necessary to issue a 1099 to web design company, printing company or not?

Thaonguyen (talk|edits) said:

26 January 2008
question: if a person working as a child care provider. I know he/she issues a document stating how much they charge their customers during the year. But who will be the issuer of 1099 MISC for that person(the child care provider)?

Fletch123 (talk|edits) said:

26 January 2008
What if a Corporation has not filed it's state annual report and is no longer considered a valid corporation aby the state. They have forfieted there corporate identy. Should they get a 1099

Ken@seamann.com (talk|edits) said:

26 January 2008
Technically, all service providers should be provided a W9 to get their info B4 you issue them a check, or you must withhold the 30%. You have no way of knowing or backup substantiation upon audit w/o the W9 on file.

Individuals normally donot issue 1099s to childcare providers. A company providing as a benefit to their employers would. The taxpayer tattles (provides the information) when they file their tax returns on Form 2441. If in doubt, send the 1099!!! If the taxpayer doesn't send out 1099, it is a violation & something that must be disclosed because it is a material misrepresentation, because non-reported 1099 amts may be disallowed on the tax return.

Thaonguyen (talk|edits) said:

27 January 2008
My question was: how a child care provider report his/her income during the year? The nature of business here is providing services, receiving compensation from other individuals (personal check or cash).

Natalie (talk|edits) said:

January 28, 2008
Thaonguyen, I'm not sure why you're asking your child care question on this discussion. Child care providers would usually report their income on Schedule C, but I guess it could be a 1065 if a partnership or 1120S/1120 if a corporation.


Ddgaccountant (talk|edits) said:

28 January 2008
This is my first time doing the 1099-Misc for my company. I have a shop that is seperate from our office building. The office building is owned by a real estate company, the shop is owned by an individual. Am I required to furnish a 1099 for the individual? It is my understanding that I am supposed to, but our accountant did not do so last year.

Sandysea (talk|edits) said:

28 January 2008
Yes, you should give a 1099 for rents....


Devildog (talk|edits) said:

29 January 2008
I have done some more research surrounding the "dealer" issue and it appears that if a company purchase >$5,000 for resale, we are required to issue a 1099.

New issue:

I have a dealer that is in Canada, but does busy only in Canada. Is he subject to IRC?

Fletch123 (talk|edits) said:

30 January 2008
What if you are supposed to issue a 1099 and the person will not give you a tax ID number and yoiu have already paid them? Should you issue a 1099 without a TIN?

Bottom Line (talk|edits) said:

30 January 2008
Asked in other thread. Yes - issue the 1099, don't pay anymore money without the TIN, expect a letter from the IRS in about a year. Very little risk of penalty.

Sedona (talk|edits) said:

30 January 2008
Question Here-Really need Help. Ok I have prepared and sent the 1099's to my Sub-Contractors and have just realized that I have put the amounts in the wrong box. I have also sent the 1096 off with the Copy A to the IRS. What do I do to correct this? What are the steps, do I do a Void and then a corrected or what!!!

Kevinh5 (talk|edits) said:

30 January 2008
but think of all the money you saved by doing it yourself!!!

CHICHING (talk|edits) said:

31 January 2008
When do the 1099-misc have to be mailed to the recepients? Or when can they be postmarked by?

JeffDH (talk|edits) said:

31 January 2008
Can someone tell me if payments to a psychologist for assessments / psychological testing being performed on candidates for employment should be reported in box 6 of 1099 for medical costs or box 7?

Bottom Line (talk|edits) said:

31 January 2008
Sedona - read the instructions for 1099 which will tell you how to correct them.

Chinging - read the instructions for 1099 which will tell you the due dates


AngieB (talk|edits) said:

31 January 2008
I need some help here...I'm not sure because of the "grey" area of non-employee compensation. My question is wether a 1099-Misc should be issued for certain situations? The scenario is as such...

We are a machine shop. We pay our sub-contractor machine shops for indivdual parts and not a service (that's the the way I see it anyhow). I do not know the service aspect for there services...machine hours, material, etc.. I have this reasoning due to the woman that trained me before I came to hold this beautiful postion of issuing 1099's. If I am supposed to, that means that I should have issued 1099's to them last year too. Does that mean that I have to correct the ones prior? Any help is greatly appreciated....please help???

JeffDH (talk|edits) said:

31 January 2008
Can someone tell me if payments to a psychologist for assessments / psychological testing being performed on candidates for employment should be reported in box 6 of 1099 for medical costs or box 7?

Dpowers7 (talk|edits) said:

31 January 2008
Question, I personally earn $850 in pay, and pay income tax on it. The Gov gets $250 of that and I am left with $600 for example. Now I hire Bob the yard guy to mow the yard for $600. (Just an example)

Now he gets $600 and has to give the Gov $175 of that. Now he hires Willy the paint boy to paint his garage for $400 and he has to give the Gov $100. Willy hires John to wax his car for $300, gov gets $75. At this point the Gov has taken/earned, $600 of the original $850 of earnings.

Does this seem right? Should all these people get a 1099? If I cannot deduct the $600 yard expense, why should I file a 1099 on the guy? The Gov already taxed that money! Is this really the basis of our tax law, to tax the same $850 over and over till there is no money left? Doesn't this appear that the Gov gets tax income of nearly 100% of all money that gets earned?

Fuzzy Faced Leader (talk|edits) said:

31 January 2008
I think your missing the point. The 1099-MISC is not a vehicle used to tax people. It is a tool used by the IRS that assists in verifying that everybody claims income earned.

I had a client audit several years ago. The IRS asked if the client sent out a 1099 on a vendor with a first & last name. The vendor was a large company, like Fred Meyer. The client had to prove the vendor was not an individual. But the auditor didn't ask if it was a corporation. This same client had a small, single proprietor vendor, and did not send out a 1099. The penalty was $ 150, per 1099, thats $ 50 for the IRS copy, $ 50 for the vendor copy and $ 50 for the taxpayer copy.


Lastminute (talk|edits) said:

1 February 2008
I am completing a 1099-Misc for an LLC (for rental payments), but a W-9 was never received, and their TIN is not on file with us - I'm trying to meet tonights deadline - any suggestions out there?

Bottom Line (talk|edits) said:

1 February 2008
Send it without the TIN.

Mrs. Arwood (talk|edits) said:

1 February 2008
Just a quick question. I have already e-filed my W-2 forms, and today I received a 1099-Misc. form from my tribe with only box 3. filled in, for the amount of $560.00 (revenue-sharing)

Do I need to fill out a 1040X ? or Do I not need to worry about filing my 1099 Misc. because box 3 is under $600.00? I've never had to do this before, so I'm a little confused.

Bottom Line (talk|edits) said:

2 February 2008
ALL income must be reported whether or not you received documentation of it such as a 1099. If you included this $560 income on your return like you are supposed to, you do not need to amend. If you did not include the income, you will need to amend the return. The $600 is immaterial to the receiver reporting the income.


Grapher17 (talk|edits) said:

3 February 2008
I worked as a freelancer for a company at the end of last year but made less than $600. Does the company have to send me a 1099? Should I file one? Or do I not need to report it as income?

Bottom Line (talk|edits) said:

3 February 2008
Because it is less than $600, the company does not have to send you a 1099. YES - you do still need to report the income. You are supposed to report ALL income.


Mrs. Arwood (talk|edits) said:

5 February 2008
Thank-you bottom line.. I have another question... When adding in my new information from my 1099-Misc. I noticed my Federal amount decreases, and my state amount remains the same. Therefore, I was going to only amend my Federal amount, However, I noticed that on my 1099, there are 4 forms (Copy 1 For State Tax Department: Copy B For Recipient: Copy 2 To be filed with recipient's state income tax return, when required.: Copy C For Payer)

Here are my new questions:

- Do I need to amend both my federal and state, because there is no change to my state return?


- Which Copy of my 1099-misc form do I send with my federal amend, and which Copy of my 1099-misc form do I send with my state amend? (Or do I only send in one amend for both?)


    • (Just some side info. - Because, I am Native American, and I work for a tribe (located on tribal trust land) and I live on tribal trust land in California, I do not pay state taxes out of my payroll, I also don't qualify for Good Renter's) *** My husband and I are only receiving $6.00 back on our State taxes, anyways, I was just filing state taxes out of good nature.***

Bottom Line (talk|edits) said:

5 February 2008
If no money shown as withheld taxes on the 1099, there is no need to attach it to the federal return. I don't know anything about the CA tax system, therefore I can't advise you on your state situation.


Accessash (talk|edits) said:

11 February 2008
Hi I have hired some independent consultants. For submitting 1099 do I need to include reimbursements like hotel stays, car hires etc. If I dont include such reimbursements, will my return be faulty? Some of these reimbursements are again reimbursed by my client.Such reimbursements may not be a charge in my books.Pls help!!

Accessash (talk|edits) said:

12 February 2008
Hi. Can anyone educate me what all types of payments would fall under payments to attorneys. Say in case if I hire an attorney for making visa petitions or to submit a state / federal return, would I need to issue 1099 to them. Thanks

Pdkeys (talk|edits) said:

14 February 2008
I am a financial advisor and I operate as a LLC. I am paid by Wachovia as an independent contractor however on a 1099-MISC item 7, non-employee compensation under my personal SS#. Wachovia says that they must pay that way because of some SEC regulations that prevent commission payments to anyone other than a registered rep (ie. no corp. or LLC). My question is how do I move the income from my personal SS# to my LLC tax ID# for reporting purposes. I know I have to first report it on my personal tax return or I am setting myself up for an audit. Thanks!

Ppacsa1985 (talk|edits) said:

14 February 2008
I am an S corp (independent contractor) and I received a 1099-Misc Box 7 under my Corporation ID# for $3K. The $3K was reimbursement for Hotel and Airfare. I have no revenue for 2007 since this is a startup and I didn't pay any salary since very little work has been done. What should I do? Do I need to have the company correct this form and resend to the IRS? Thanks

Ammorr (talk|edits) said:

15 February 2008
Can you issue a 1099 to an LLC or individual if you do not have the tax id previously on file? We have address and amount, but they won't respond to requests for their tax ID info. Also if you pay an independent consultant for travel, can you just 1099 them for consulting services and then post their travel to "travel expense" G/L?

Torka (talk|edits) said:

15 February 2008
What if a company issued 5 1099-MISC forms already and then realized they should have issued 6? How do we file the corrected return? Do we file 1 1099-MISC with a 1096 or reissue all 6?

Bottom Line (talk|edits) said:

15 February 2008
Torka - look at the instructions for 1099-MISC. The correction procedure is in there.

Torka (talk|edits) said:

15 February 2008
Bottom Line - Yes I read them through and also the General Instructions for Form 1099 which gives better instructions for corrections. I can't find any specific instructions for issuing an ADDITIONAL 1099. Any idea?

Sandysea (talk|edits) said:

15 February 2008
Issue one more with a new 1096. Why reissue 1099's to the other 5? Those people will think they got 2 for the same amount. The other option is to file all 6 and then for the 5 you already issued to mark them as corrected....


Abradley (talk|edits) said:

3 March 2008
I was informed 2/29 that a 1099 was incorrect. of course, I had submitted the 1096 to the IRS. Can anyone tell me how to correct the 1096. I think i can handle to 1099.

Thanks.

SLS (talk|edits) said:

12 March 2008
I have already submitted my 1096 to the IRS and now I found out that I have another Vendor that should have been 1099. Can anyone tell me how to correct this. This is similar to Abradley's question, but i need to add a 1099.

Thanks SLS


Juliabrollo (talk|edits) said:

19 March 2008
I issued a 1099 to a company that sold merchandise (metal mouldings) to us and they have called us back to ask us to void it. I understand that merchandise can fall under the exception, but our company has a policy of sending out 1099's to all sole proprietors regardless. Do I have really have to issue a voided 1099 and an amended 1096?

911disp (talk|edits) said:

21 March 2008
I work for a government agency and was issued some back pay for an out of classification settlement. The agency has not sent out a 1099 form on this money. I already e-filed with just my W-2. The amount was not included in my W-2. If the agency never mails me a 1099 do I still need to claim this income on my taxes???

DZCPA (talk|edits) said:

21 March 2008
911disp. All taxable income must be claimed regardless whether you receive a 1099 form or not.

DZCPA (talk|edits) said:

21 March 2008
911disp. All taxable income must be claimed regardless whether you receive a 1099 form or not.


Shoebox (talk|edits) said:

8 April 2008
Question: I work for a pharmaceutical company and have always been confused as to whether 1099s should be sent to medical organizations for educational grants we give them, or for exhibitor fees we pay in order to exhibit at their sponsored functions. Can anyone give me any guidance on this????

Nancyshoemake (talk|edits) said:

8 April 2008
if the payment is made to a corporation, no 1099 is required.

Kwame (talk|edits) said:

10 April 2008
I did an internet job for a friend and got a check for over $1000 in April 2007. In September 2007 I formed an LLC. Tax time came and the friend refused to issue me a 1099-MISC, he claimed he was filing the payment as business expense. Is it OK to file without the 1099 MISC? What are the implications?

Joanmcq (talk|edits) said:

10 April 2008
Sure, you report all income whether you got a 1099 or not.

Kwame (talk|edits) said:

10 April 2008
My problem is not filing/reporting but the IRS consequences of filing without 1099 for myself and my friend.

Bjeter (talk|edits) said:

10 April 2008
fill out a profile

Kwame (talk|edits) said:

10 April 2008
What profile?


Vinod (talk|edits) said:

16 April 2008
Hi,

Do we have to issue 1099-MISc for Cleaning and sanitation?

Avocat (talk|edits) said:

17 April 2008
ok - last year, we paid $7900 to a person who bought our house. $4400 of that was rent straight out and $3500 was settlement on rents as well after a two week holdover for which she sued us (long story!). all'n all, she got $7900 from us and we sent her a 1099-MISC even though, as invidividuals, we don't plan to take a deduction for any of that. in response and with her return, she sent us a "1099-MISC" for the exact same amount ($7900) with a letter saying to the gov that she did receive this money (she disputes the timing of the $3500) but to correct the "error, she issued me a 1099-misc" for the exact amount. it smells like retaliation... but what do i do about the 1099-MISC she issued admitting that it was strictly to "correct our error"? while it is now established she's crazy, how do i signal the IRS about this thing? :) or will i have to pay tax on this amount i never received but instead paid?


Kash 074 (talk|edits) said:

4 July 2008
I have a consultant who worked for us in 2004 recognised but was paid in 2007 accural basis...should 1099 be issued in 2004 or 2007

What is difference between Box 7 and Box 14 for reporting fees paid to Lawyer Shoudl i report immigration, general conseling and legal fees paid for filing patent in box 7 or box 14 .. Please help Thanks


Seasoned (talk|edits) said:

6 January 2009
Yet another question...

Golf club operating as an LLC, taxed as a partnership per their completed W-9. We paid them a deposit well over the $600 threshold in December 2008 for a golf outing to be held in July 2009.

I have told my boss that I feel a 1099-MISC should be issued for the deposit, and another one next January covering the remainder of the cost paid in 2009. The company clearly is not incorporated - therefore I believe the 1099 is required.

We received an e-mail from our national office (we are a charter) with information on issuing 1099's. Under a heading of generl information, it reads "...any individual to whom you have paid $600 r more for services and any lawyer...". My boss is adamant, that because the golf club is neither an indiviual nor a lawyer, we are not required to issue a 1099 for any fees paid to this LLC.

Bottom line - yes or no to sending a 1099-MISC?

(duplicate posts deleted)

TDono2 (talk|edits) said:

6 January 2009
Seems you have a hiccup! If the company stated on their W-9 they are taxed as a partnership, then YES they get a 1099. A partnership is a collection of individuals that agree to split the revenue and expenses in an agreed upon manner. Maybe that will help your boss understand. Reg. 1.6041-3(p)

Seasoned (talk|edits) said:

6 January 2009
Yes, sorry about that... I don't see any way to modify my messages or else I'd delete the extra 2!

THANK YOU! At least I know I'm not nuts! My boss is absolutely refusing to listen and has now told me in no uncertain terms that we will not be issuing the 1099. My hands are tied, despite knowing it is the wrong course of action.

Natalie (talk|edits) said:

January 6, 2009
Seasoned, how about showing him the instructions. They are very clear.

Seasoned (talk|edits) said:

6 January 2009
I have tried that - no go. She went to National (we are a chapter of national) and someone there told her no, we didn't have to do this 1099. My boss has a law degree, but no tax experience.

As I have no formal degree, she doesn't think I know what's what. 7 years experience working for a CPA, as the sole employee, doing the work, doing the research and all... apparently doesn't mean squat. She tells me that what came from national is confusing - but will take their word for it. I had her send me a copy of an email from national so I can attach that to the W-9. Since it's her backside on the line as treasurer (and not my own) I don't know what else I could do.

Blrgcpa (talk|edits) said:

6 January 2009
Any unincorporated business that gets paid more than $600.00 gets a 1099. I'm certain you can find it on the irs web site. Go to irs.gov

Natalie (talk|edits) said:

January 7, 2009
Well Seasoned, I guess at this point I would evaluate the job if I were you. If there is a pattern of this type of thing, perhaps it's time to move on.

RoyDaleOne (talk|edits) said:

7 January 2009
In 2008 the amount is a deposit and not for services. Not what?

Gus (talk|edits) said:

29 January 2009
Hello,

Does anyone of you know what to do with copy 1 of the 1099-misc? do they need to be sent to the payer's state treasury, or the receipient's?

Blrgcpa (talk|edits) said:

30 January 2009
Each state is different. Check with the state in question. NYS doesn't want them. They get the info directly from the IRS.

KatieJ (talk|edits) said:

31 January 2009
If you go to taxadmin.org and click on "links" in the left hand column, you will get a map with direct links to all of the state revenue departments.


Thedude (talk|edits) said:

20 February 2007
Hey All,

I have a similar situation, and could use some help, and I found your discussion while googling my problem. Maybe somebody can answer this for me? I have a full time job as an IT guy. To make some extra money, I did some work on the side for this law firm. Well I figured it was under the table, but they ended up sending me a 1099-MISC, with the income listed in field 3 as "other income". Well Im filling out my taxes online, and I need to figure out if I should report it in 1040 line 21 or sch C line 1? I dont mind paying taxes on the work I did, but I wouldnt call my self self-employed, since I am employed full time by another company, and I definetely dont want to have to get a business liceense. Any advice for my situation? Thanks!

Thedude (talk|edits) said:

22 February 2007
anybody??

Death&Taxes (talk|edits) said:

22 February 2007
In this case I would say you are self-employed since you went out on your own to solicit the business, or rather the business may have come to you. They hired you for your professional ability. This is true even though the 1099 is wrong in calling it other income.

Kevinh5 (talk|edits) said:

22 February 2007
"under the table income" is still taxable.

Kytaxpreparer (talk|edits) said:

22 February 2007
These are just my questions for you-are you going to work for them again this year or even someone else on the side?? IF you are, sounds like you are doing a side business and need to do sched c-in which case, you can deduct miles to the job, exp. etc. How much was the 1099 for?

Thedude (talk|edits) said:

22 February 2007
no, i dont plan on working for them anymore. i have a full time job, and i only helped them like 5 or so times to get their computers up and running. then i referred them to somebody else to maintain the network. the total was just under $2,000. does that matter?

so they were wrong to mark it as "other income"? and since they did, does that mean that technically i could put it under the 1040 line 21 category and it should be ok?

thanks for you help.

Kevinh5 (talk|edits) said:

22 February 2007
sounds like self-employment income to me. If you don't have any deductions, include it on line 21 and fill out Sch SE.

Thedude (talk|edits) said:

22 February 2007
so whats the difference between Sch C and SE?

Ex-IRS (talk|edits) said:

23 February 2007
The Form 1099-MISC is not binding on the IRS and by itself does not determine the employment status of the person receiving the Form 1099. Same thing for any "contracts" or "agreements" between the two parties.

Given the facts in the original post, the income this person received could be considered as hobby income, not self-employment income. I would report the income on line 21 as hobby incoe and report any hobby expenses on Schedule A as subject to the 2% floor.

"so whats the difference between Sch C and SE?"

Thedude, Schedule C is the schedule used to report income and expenses (resulting in a net profit or net loss), and Schedule SE is where the net profit (if any) is carried over to calculate the self-employment tax due (which is in addition to any income tax on the net profit).

Kevinh5 (talk|edits) said:

23 February 2007
Ex-IRS, then under the same logic, I prepare taxes for a living, but I just can't get enough, so after hours and during my spare time I go on vacation and prepare people's taxes as my hobby. Ones I do at my office would be subject to SE (were it not for the fact that I get a W-2 from my S-corp for doing this). Ones I do at home in the evening and on vacation are just subject to income tax, but not SE tax. Right?

Ex-IRS (talk|edits) said:

23 February 2007
I'd agree with you, Kevinh5, if you have no expectaion of making a taxable profit for the work you do on vacation.

The retired client seems to be doing the work just to have something to do after he has retired. I am inferring he does not have the requisite intent to make a taxable profit but I could be wrong on that.

The IRS defines a hobby as an activity that is pursued without expecting to make a taxable profit, that is, it is done because the person likes doing it, regardless of the cost. But if the person can demonstrate that they are involved in an activity with the expectation of making money, the IRS will consider it a business.

There are also two IRS tests used to determine if an activity is a business rather than a hobby.

1. The profit test

  A business if you can show you earned money on the activity in three out of five years.

2. The factors-and-circumstance test

  Some of the factors looked at include
  a. Whether you carry on the activity in a businesslike manner such as keeping good books and records, 
     promoting your business, etc.
  b. How much time and effort you devote to the activity.
  c. Whether you depend on income from the activity for your livelihood.

Skasselea (talk|edits) said:

24 February 2007
Ex-IRS, I'm sorry, but your answer is simply way, way off base.

Solomon (talk|edits) said:

24 February 2007
The Batok case shows how far off.

Ex-IRS (talk|edits) said:

24 February 2007
"Ex-IRS, I'm sorry, but your answer is simply way, way off base."

Really? Please explain.

Skasselea (talk|edits) said:

24 February 2007
The other posters have already done that.

Ex-IRS (talk|edits) said:

24 February 2007
Skasselea:

"Ex-IRS, I'm sorry, but your answer is simply way, way off base."

Solomon:

"The Batok case shows how far off."

Skasselea:

"The other posters have already done that."

Did either of you even bother to read the Batok decision? From your pithy comments I'd venture to say NO so to educate you I'm including a summary below (My comments are in bold).

John A. and Mary L. Batok. v Commissioner 64 TCM 1992-727 64 TCM 1605 (Dec. 48,709(M) (1992)

During 1988 taxpayer (husband) was retired. (Same as the retired client in the original post) He was an auto mechanic and was involved in producing stained glass as a HOBBY. (Hobby...hmmm, where has that been mentioned before?) During 1988 taxpayer was hired for ONE MONTH to install office windows, something he had NEVER done before. Taxpayer was issued a form 1099 reporting the payment of $4,000 for installing the windows as nonemployee compensation. (Same as the retired client was paid in the original post) IRS determined that he failed to report $4,000 compensation as self employment income subject to self employment tax. Taxpayer did not consider himself to be engaged in the business (Just like my "he does not have the requisite intent to make a taxable profit" comment in my post) of glass installation, staining or engraving. However, since IRS wanted to treat the $4,000 as self employment income, he decided to deduct business expenses related to such a trade, and he filed an amended return claiming a loss of $3,000 after listing $7,000 in expenses.

Court ruled: A taxpayer must be involved in an activity with continuity, regularity and with profit objective to be considered engaged in a trade or business. (Gosh, just as my advice that is allegedly "way off base" and that "The Batok case shows how far off.)" Taxpayer's one time job of installing windows for one month is too sporadic to be considered a trade or a business. The fact that this was a "one-time job” was significant in the court's determination. The court added that a "sporadic activity, hobby, or amusement" does not qualify as a trade or business. The court held that he was not liable for self employment tax. (Hey, I said the same thing in my first post! ""the income this person received could be considered as hobby income, not self-employment income.")

Now if either of you two can point out where exactly I was so far off base from the Batok decision, I'm waiting with bated breath.

To make it clearer, the 1099 income the retired client receieved in the original post is NOT self-employement income and is NOT subject to SE Tax. It COULD be considered to be hobby income, and if so, any related expenses would be taken on Schedule A. The income should be reported on Form 1040, Line 21.

Death&Taxes (talk|edits) said:

24 February 2007
I think the others have been talking about TheDude and his income from IT work. He introduced this on 2/20. He does not sound like a retiree at all.

Ex-IRS (talk|edits) said:

24 February 2007
Yes, some comments by others were concerning TheDude's post. My only comment that was directed to theDude was when I answered his question ""so whats the difference between Sch C and SE?"

However, all of my other comments were on the original post (that had the retired client) by MsTwizz so Skasselea's and Solomon's comments were specifically responding to my comments on her issue and not to my comment to TheDude's post.

Even when I asked for an explanation, all that I got was from Skasselea was "The other posters have already done that." when in fact they had done nothing of the sort and certainly Solomon's flippant remark, ""The Batok case shows how far off." was not even close to explaining anything.

Ex-IRS (talk|edits) said:

27 February 2007
"Now if either of you two can point out where exactly I was so far off base from the Batok decision, I'm waiting with bated breath."

Skasselea, Solomon, it has been 3 days...I'm still waiting.

Skasselea (talk|edits) said:

28 February 2007
Since you don't have a license to protect, you can take whatever position you darn well please. But that's a story for another day isn't it? I don't take the bait of someone whose views I don't respect.

Ex-IRS (talk|edits) said:

28 February 2007
I apologize in advance to everyone reading this, but I won't let personal attacks against me by Steve Kassel, EA, go without a response.

When I worked at the IRS, I didn't back down from the IRS managers and employee thugs everytime I spoke up about something they did that was unethical or illegal, and I sure as hell won't back down from the personal attacks and threats from you, Steve Kassel, EA.

Steve Kassel, EA, I asked you a simple question, where exactly was I so far off base from the Batok decision?

Just as I expected, you answered with another non-answer. I knew you wouldn't be man enough to back up your post ("Ex-IRS, I'm sorry, but your answer is simply way, way off base.") with any kind of intelligent debate, or legal citation, etc. It is obvious that you never had anything to back it up because your post was never more than just a personal attack against me.

Why do you have to personally attack me? Why can't you just answer the question?

("The Almighty says don't change the subject; just answer the ******* question." Stephen, the crazy Irish man in "Braveheart")

"Since you don't have a license to protect, you can take whatever position you darn well please."

LICENSE?!?! What does having a licence have to do with me asking you to explain the legal basis, reasoning, etc behind your post, "Ex-IRS, I'm sorry, but your answer is simply way, way off base." ???

First of all, I don't take whatever position I darn well please. If I have done so on any of my posts, please point it out to me.

Secondly, "License? I don't need no stinking license!" ("Badges? We don't need no stinking badges!" Mexican bandit in "Blazing Saddles") LOL, sorry everyone, I just had to put that in there.

Steve Kassel, EA, I base my answers on my 20 years experience at the IRS, on the IRC, on IRS regulations, procedures and policies, on court cases, etc. I've done it in this thread using the Batok decision and in other threads I've posted on. What does a license have anything to do with that?

Finally, license schmilicense, you are proof positive that having a license doesn't confer any special abilities or intelligence to the license holder. ("Kahn, I'm laughing at the superior intellect." Captain Kirk in "The Wrath of Kahn")

No, I don't have a license, but my reputation and integrity are far more important than any piece of paper like your EA license. My reputation and integrity are why I was willing to blow the whistle on corrupt IRS manager and employee thugs, fully knowing they would retaliate (just like you are doing here) and that I would lose my job. Fine, I lost my job but I kept my reputation and integrity.

For whatever reason you are intent on smearing my reputation and integrity ("Ex-IRS, I'm sorry, but your answer is simply way, way off base.") Visitors to this site reading that garbage will be lead to believe that I'm incompetent because you, Steve Kassel, EA, said so. ("He said that ex-IRS was way, way off base, and he must be right because he's a licensed Enrolled Agent. Thank god I didn't follow the advice of that incompetent ex-IRS guy!")

I won't stand for that from you Steve Kassel, EA, or anyone else.

"But that's a story for another day isn't it?"

What the heck do you mean by this? Are you threatening me???

"I don't take the bait of someone whose views I don't respect."

Ah, the classic ad hominem attack [1], the usual knee-jerk attack tactic from someone that knows they can't intelligently argue their position.

Since you seem to be only capable of answering my simple question to you with a personal attack on me, by god I'm not above of doing the same by resorting to your level of juvenile tactics.

BAIT?!?!?!? LOL, all I asked you to do was explain your post ("Ex-IRS, I'm sorry, but your answer is simply way, way off base.") How is that baiting you??????

You don't respect me? That's been evident from your first personal attack against me. After your first flippant response ("The other posters have already done that.") I still had a tiny little bit of respect for you but now, I have less than ZERO respect for you.

Steve Kassel, EA, what exactly is it about my posts that you don't respect? Is it that I base my answers on my 20 years experience at the IRS, on the IRC, on IRS regulations, procedures and policies, on court cases, etc.????

I have yet to post any answer on any tax question thread that is based on anything but that, so your disrepect for me is, to use your words, "simply way, way off base".

It is sad that you've had to bring these kinds of personal attacks and threats against me to an otherwise fine tax forum. Thanks, Steve Kassel, EA, for ruining it for everyone.

To the Moderators, please lock this thread, if possible, as Steve Kassel, EA, has nothing substantive to add to this tax question, can't back up his personal attacks against my posts with any kind of legal citation, IRS ruling, etc. and can only respond to my questions with personal attacks.

Skasselea (talk|edits) said:

28 February 2007
And you wonder why he doesn't have a license? As I stated, I do not respect your views. I said exactly what I meant and I meant exactly what I said.

Kevinh5 (talk|edits) said:

28 February 2007
Ex-IRS, most readers will take everything they read with a grain of salt. Meaning - they don't necessarily come to the same conclusion about someone just because someone else wrote something about them. For example, I have been corrected a few times on this board, often when someone knew a little more about a tax court case or regulation than I did. Does that mean all of my answers are wrong? NO. It just means that anyone looking for free answers had better follow up with a little homework of their own and not always take the first answer someone else gives.

As far as this issue is concerned, I think it is a matter of opinion as to whether the Batok case applies or not, and if so, how much. Your opinion is no more or less valuable than Steve's. I won't defend either. But I do agree that if someone feels someone's answer was wrong they should point out why.

So don't take it personally. Steve didn't want to explain why he felt you were wrong in this case. That doesn't mean he was right and you were wrong, it just means that he didn't want to explain his position.

The discussion should lead the tax professional to do a little research to see if he felt BATOK did apply or not. We could put 100 people in a room and take a vote, but what difference would that make? Unless we were willing to go to tax court (or above), we would really not know whether we had a strong argument either way.

So both of you just chill out a little. No personal attacks, please.

Ex-IRS (talk|edits) said:

5 March 2007
"So don't take it personally."

Kevinh5, thanks for the comments. After reading Steve Kassel's, EA, angry rant in this post Discussion:Refund lost due to following IRS advice - help?, I'll take your advice as I didn't realize he has anger issues.

"...it just means that he didn't want to explain his position."

Sorry, no. It means Steve Kassel, EA, can't defend his comments with anything like court cases, IRC sections, etc. as evidenced by his erroneous statements in his angry rant (see below).

"And you wonder why he doesn't have a license? As I stated, I do not respect your views. I said exactly what I meant and I meant exactly what I said."

Steve Kassel, EA, I wonder how you ever got, and keep, your EA license as several of your comments in your angry rant cited above are way, way off base and it wouldn't surprise me to learn you've previously been sued for malpractice or negligency by some of your clients.

Example 1. "...your statements concerning how things transpired are simply not credible."

Steve Kassel, EA, you obviously never worked at a Service Center in a phone job. What lostbyirs described happens EVERY DAY and his description was very accurate.

Example 2. "The refund statute is THREE years....period. No ifs, no ands, no buts."

Steve Kassel, EA, you are incorrect.

Example 3. "Additionally, some of the statements made by a tax professional are misleading. Filing an extension does NOT extend the refund statute"

Whew, what a doozy!! Steve Kassel, EA, you ain't even close on that statement. I hope no one here uses your erroneous advice. It just makes me wonder how many of your clients you have screwed by not knowing the correct laws on refunds.

Example 4. "Third, IRS does darn well (sic) exactly what the statute is for refunds."

Steve Kassel, EA, you are wrong again. Some IRS people know the statute for refunds, many of them, like you, do not.

Example 5. "There is no way that the Advocate will do anything."

Steve Kassel, EA, you are wrong again. Some IRS employees are ogres, many are not. I've personally seen it happen plenty of times where an IRS employee (Taxpayer Advocate or regular employee) will give the taxpayer a break REGARDLESS of the law. That happens EVERY day.

Thedude (talk|edits) said:

6 March 2007
sorry, dont mean to fuel the fire, but i cant stand people that dont back up their statements with logical arguments. i agree with ex-irs. not on his tax advice, since i know nothing about taxes, but on the fact that steve kassel is a coward who obviously knows he is wrong, and is running away from any kind of debate with his tail between his legs. if you are going to say somebody is way off base, than have the guts to back it up with a reason why.

steve comes into this thread, and the first thing he says is "Ex-IRS, I'm sorry, but your answer is simply way, way off base". he didnt provide any contribution of his own on the topic, just that somebody else is wrong, without an explanation. then, he must have realized he was the one who was way off base, because he could not come up with a simple answer to prove his statement.

Tdoyle (talk|edits) said:

March 6, 2007
I'm going to paste the Code of Conduct here as a reminder of what behavior the community agreed was appropriate here on TaxAlmanac. Particularly relevant here is #2 - No Personal Attacks - Do not make personal attacks anywhere on TaxAlmanac. Comment on the content, not on the contributor. Personal attacks will not help you make a point; they hurt the community and deter users from joining in.

The following Code of Conduct was put together by the TaxAlmanac Community. Please keep these items in mind as you interact here on the site. Please feel free to comment on what you'd like to see added or changed - we need your input!


Code of Conduct

1. Follow The Golden Rule - Treat others as you would want to be treated.

2. No Personal Attacks - Do not make personal attacks anywhere on TaxAlmanac. Comment on the content, not on the contributor. Personal attacks will not help you make a point; they hurt the community and deter users from joining in.

3. Don't Bite the Newcomers - New contributors are prospective members and are therefore our most valuable resource. We must treat newcomers with kindness and patience — nothing scares potentially valuable contributors away faster than hostility or elitism. While many newcomers hit the ground running, some lack knowledge about the way we do things. If you can't tell whether they are a Tax Professional, politely ask them to complete their profile.

4. Be polite - Keep in mind that text is ambiguous and often seems ruder than the same words coming from a person standing in front of you. Irony isn't always obvious - text comes without facial expressions, vocal inflection or body language. Be careful of the words you choose - what you intended might not be what others perceive, and what you read might not be what the author intended.

5. Be civil - Remind yourself that these are people you're dealing with. They are individuals with feelings and probably have other people in the world who love them. Try to treat others with dignity.

6. Give praise when due - Everybody likes to feel appreciated, especially in an environment that often requires compromise. Drop a friendly note on users' talk pages or after someone takes the time to answer a question in the discussion forum.

7. Be open and warmly welcoming - Treat your fellow productive, well-meaning members of TaxAlmanac with respect and good will.

8. Don't Bite the Non-Professionals - Although they are no longer invited to sign up for a TA account and start new questions, sometimes non-professionals who already have an account will visit TaxAlmanac and participate in the Consumer Question Forum. You might feel their questions are too basic or that they need the help of a professional. You are under no obligation to answer their questions, but if you do, please be sure to do so in a manner that follows the Code of Conduct. You may move their discussion to the Consumer Question forum if it is mis-posted in the Tax or Accounting Question Forums.

9. Help mediate disagreements between others

10. Do not edit the forum posts of others. Other than spelling corrections, adding links, and other minor edits, users should not edit the discussion forum posts made by others.

11. No SPAM please. Spam posters may be permanently blocked from this site.

Thank you,

- Tim Doyle, TaxAlmanac Moderator - Talk to me 07:12, 6 March 2007 (CST)

RSRAGENCY (talk|edits) said:

6 March 2007
WELL....it's about time someone stepped in and threw water on this fire!!

I have been using this site for the past few seasons and I always felt we had a good community of people willing to help.....but this got completely outrageous! I'm still waiting for a reply to my post.....I feel like I got swallowed up in a sewer!! Can we get back to the reason why we are all here????

Ex-IRS (talk|edits) said:

6 March 2007
"if you are going to say somebody is way off base, than have the guts to back it up with a reason why."

Thedude, Amen brother, and thanks for the support!

The only thing I have been asking Steve Kassel, EA, for in this thread is some kind of facts based on the IRC, IRS publications, court cases, etc to back up his allegation that I'm wrong on my advice.

I've seen others back up their posts on other threads, why is Steve Kassel, EA, getting a free pass on this one?

Back up your allegations with some facts. This is a standard that should apply to anyone that disputes any advice posted on here and it leads to healthy debate. If not, you're just wasting bandwidth and damaging someone's livelihood by misleading others into questioning the competence of the person you are accusing is wrong.

I know I don't know everything about taxes, no one here does, but I do know that in this particular thread the advice I gave is correct.

If anyone proves me wrong on any advice I post on any thread then I'll be happy to post that I'm wrong. However, I won't stand for baseless accusations against me.

SunGod (talk|edits) said:

6 March 2007
Ex-IRS: Your statement that no one knows taxes in this forum is not accurate. There are some great contributors who have a wealth of knowledge and who are right most of the time. Riley2 is a darn good example.

Ex-IRS (talk|edits) said:

7 March 2007
"Ex-IRS: Your statement that no one knows taxes in this forum is not accurate."

SunGod, that is not what I wrote. I said, "I know I don't know everything about taxes, no one here does,..." (emphasis added).

Yes, Riley2 is very knowledgeable, as are others, but I doubt he knows everything about taxes.

If he does, then maybe he ought to be running the IRS because even they've admitted that they don't know the entire IRC, regulations, etc. Congress has admitted the same thing, as have a great deal of CPAs, accountants, tax lawyers, tax judges, etc.

"...who are right most of the time." (emphasis added)

You just admitted the same thing I said, that no one knows everything about taxes.

NYBBunch (talk|edits) said:

5 April 2007
Hi

My daughter is a college student. The first three months of 2006 she worked for a company that considered her an employee and withheld the proper amount of taxes on about $6000 of wages.

She also worked in her home for a for a business that formats textbooks so they can translated into Braille. She was paid per page formatted. She received a 1099-misc for work she did during 2006 she earned a little over $5000.

As a student should she list this as "other" income or as SE income? If she lists this as "other" she gets a $500 refund and if she lists it as SE income she owes $300.

From reading all the post above this seems to be a murky subject so I would appreciate any help.

Solomon (talk|edits) said:

5 April 2007
I vote Sch C.

Glmpllc (talk|edits) said:

5 April 2007
NYBB....her status as a student has nothing to do with whether the 1099 income is subject to SE tax. Based on the facts as you have presented them, if I was preparing the return, I would report in on Sched C, subject to SE tax.

Death&Taxes (talk|edits) said:

5 April 2007
This is definitely a Schedule C; everything about it smacks of self-employment in that she could earn more by doing more, set her own schedule, choose her time and place of work, and had the technical ability to do the work without training.

Deback (talk|edits) said:

April 5, 2007
Sch C and SE

NYBBunch (talk|edits) said:

5 April 2007
Hi

Thanks so much for the help. If you wouldn't mind one more question. Is she eligible to deduct expenses like a new computer monitor and mileage to deliver and pick up work, home office?

BB

Death&Taxes (talk|edits) said:

5 April 2007
Go for it, but recognize a computer is 'listed property' so as someone will surely note, she will need a different one to use for school/internet etc. Then again, it is being used in her place of business!

Solarsinned (talk|edits) said:

8 April 2007
Hi, my wife teaches at a University, one or two courses per semester. Last year she also taught a course to employees of an outside, unrelated business. She received a 1099-misc for this. She isn't soliciting any other outside gigs; it was just the one time. Is there an easy way to work this into our 1040 form? If not, what would be the hard way? It DOES seem murky... Thanks!

Kevinh5 (talk|edits) said:

8 April 2007
Did she have any expenses for this work?

Solarsinned (talk|edits) said:

8 April 2007
Nothing that was specifically purchased for that course; she didn't even go there by car, because it was just a few blocks from where we live. Only thing she used was our laptop, but powerpoint was already installed.

Bottom Line (talk|edits) said:

8 April 2007
If one time only, in and out on Sch C then show on line 21 so no SE tax. If she'll do this every year, Sch C with related SE tax

Solarsinned (talk|edits) said:

9 April 2007
What precisely do you mean by "in and out on Sch C then show on line 21"?

On another note, can we still file jointly?

We're (originally) from a country where most of this stuff is automated, so we're quite boggled by... the diversity. Anyway, thanks for your help. :)

Bottom Line (talk|edits) said:

9 April 2007
Show the money as income on the Sch C then show it as a line item expense with some type of short explanation such as Consulting Fee. The amount received you would then show on line 21 of the 1040 form. This way you are reporting the income but you do not have to pay self employment tax on it which is roughly 15% in addition to income tax.

Based on what you've said above, I don't see any reason why you can't file jointly.

Davidwayne (talk|edits) said:

9 April 2007
Dear Members

I received a 1099 misc from a bankruptcy settlement and they lised the amount paid to me in line 7 (non employe) When I do my taxes with TaxAct and enter the amount shown in line 7 the program starts quizzing me about business losses and gain Should I enter the amount as if it were in line 3

Best Regards

Deback (talk|edits) said:

April 9, 2007
Enter the amount as income on Sch C (from line 7, Form 1099-MISC) and then enter the same amount as an "Other Expense" with a description of "Bankruptcy settlement reported on the wrong form" and then fill out Form 982 and check the "Bankruptcy" box. That is, if this is an amount that was included in the bankruptcy that should have been reported on Form 1099-C.

Davidwayne (talk|edits) said:

9 April 2007
Thanks greatly for fast reply.

Is form 982 correct for me ? It seems to be for an individual who has filed bankruptcy and had debt discharged.

A company I worked for filed Chapter 7 and the case was turned over to a federal trustee . I filed a claim for money owed me as did other employees and businesses. Finnaly the trustee worked out a plan to pay us from the company assets. So I understand why it's listed the amount on line 7 as nonemployee on the 1099 misc they sent me , but I don't know where to report it using TaxAct Any suggestions or report it as if the dollar amount was shown on line 3 instead of line 7

Glmpllc (talk|edits) said:

9 April 2007
I don't agree that the teacher's outside teaching income is not subject to SE tax...my two cents

Blrgcpa (talk|edits) said:

9 April 2007
All these instances require a sched c or c-ez. There are certain categories that are misc income ie a casual estate executor, prize winner.

All the examples asked above need a sched c, or c-ez depending upon circumstance.

If the retired person pays se tax, the ss will increase because of it. All others, it will help you in later years.


Wilshire (talk|edits) said:

10 April 2007
I've read through this thread but must say I still don't know how to consider my situation.

My wife did some work helping out around an office. It was likely a one time thing and lasted for a couple months. The income was about 4K and there are no expenses to speak of. I've been advised to report this on 1040 line 21 since this was not work done as a business. However much of what I've read in this thread along with this IRS FAQ indicate that any income reported on a 1099-MISC MUST be reported on a Sched C.

She also did other work for another person's sole proprietorship and was paid only a few hundred dollars. There is no 1099 for this work but the money paid to her was reported as a business expense on the companies Sched C.

What is the best way to deal with these two situations? Thanks very much for any help.

Deback (talk|edits) said:

April 10, 2007
Wilshire - Schedules C and SE, as independent contractor.


DavidWayne - Sorry, please disregard my answer. I missed the part where you said the company paid you. I thought you had debt cancelled in a bankruptcy.

Wilshire (talk|edits) said:

10 April 2007
Wilshire - Schedules C and SE, as independent contractor.

Deback - Thanks. Would that apply for both cases? So I'll end up with 2 Sched C's? Or could I include both amounts under 1 Sched C?

Deback (talk|edits) said:

April 10, 2007
I would include all of her "miscellaneous work" income on one Sch C.

Wilshire (talk|edits) said:

10 April 2007
Sounds good. Would code 561490 Other business support services be appropriate in box B on the Sched C? And what type of description would be appropriate for box A?

Deback (talk|edits) said:

April 10, 2007
Well, I don't know what kind of work she did, so I can't answer your first question, but even 999999 would work. The description could be anything simple, such as, Miscellaneous Work. It really doesn't matter. Line 1 is what matters.

Wilshire (talk|edits) said:

10 April 2007
Thanks so much for the help Deback.


Bennettl (talk|edits) said:

14 July 2010
I have a question about the 1099-misc penalties also. My father operated one of those sweepstakes parlors that people are opening across the east coast. For those of you unfamiliar with this,I'll briefly describe it. Customers come in, buy internet time, and get free entries into a sweepstakes where they could win up to 3000.00. They could also win prizes as low as 5 cents. The IRS confiscated his equipment last month and is n the process of determining action. He filed 5 1099-misc for people who gave them their information. The IRS is saying that everyone who accumulated 600 worth of winnings should have been 1099'd. I think that is impossible to track and don't see how this could possibly stand in court. Does everyone who wins more than 600.00 on the various state lotteries each year get a 1099. No because it is untraceable. What is the fine for just not filing the 1099's. I have heard 50 each with a maximum of 100,000 and I've also heard 100.00 each with no maximum.

Triley860 (talk|edits) said:

28 September 2010
Lottery and other gambling winnings are reportable on Form W-2G, which despite its name is a form of 1099, and reported to IRS. It's not really a type of W-2, which go to the SSA. Winnings are generally reportable if a single wager, or a group of identical wagers, totals $600 in winnings or earns at least 300 times the amount of the bet. So, when a person cashes in a $1,000 lottery ticket, you bet they get a W-2G which is reported at the end of the year to IRS. However, if they win 10 different $100 prizes, they don't report anything.

"Sweepstakes" winnings would be reported on Form 1099-MISC in Box 3 "Prizes and Awards". In the case of a 1099, if they win a total of $600 for the whole year (as opposed to a single wager or group of identical wagers on the W-2G) you do need to report this to IRS.

My experience with this comes from providing purse accounting software to horse race tracks. A jockey (or driver for harness racing) might only earn $15 for a single race, but if he wins a total of more than $600 in a year he must get a 1099-MISC. If he fails to complete a W-9 or otherwise provide his tax ID information, we are required to withhold 28% of his winnings.

CathyC (talk|edits) said:

20 January 2012
Can anyone tell me if I need to issue 1099's to not-for-profit companies or local municipalities?

Transfreight (talk|edits) said:

28 January 2013
Question: Who must file 1099s-MISC?... more specifically, I represent a Canadian company that has a FEIN and files 1120F, and has what otherwise would have been reportable transactions with US vendors. Since the "reporting" entity is foreign, does it have to file 1099s -MISC?

Thanks

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