Wednesday, January 6, 2010

1099 Season


It’s that time of year again, when questions about 1099’s fly through the air like sparks before an electrical storm. Who sends them? Who receives them? Why? When? How? Here’s a few basics, just to get started with, dealing ONLY with the 1099-MISC:

1099’s are issued by your business to anyone who provides services to you for $600 or more during a calendar year. Unless the provider of services is incorporated. Then you can skip the 1099.

How do you know if they’re incorporated? Prior to paying anyone for services, you should hand them a W-9, or mail it, or email it. The provider of services completes the W-9, and on it they can indicate if they’re a corporation and therefore not subject to receiving a 1099. The W-9 also gives you the all-important tax ID number, without which you cannot file a 1099. This is why we ask for a completed W-9 prior to payment, and, hopefully, prior to receiving services, to avoid the sort of skirmishes wherein one party asks for the information in order to comply with the IRS regulations and the second party refuses to provide it, and they’ve already received their payment. (See below for what to do in that case.)

There are exceptions, of course, this being a federal tax law sort of thing. Lawyers are to receive a 1099 if you pay them anything at all. You can often find their tax ID on their letterhead, in which case, no need for a W-9.

What if materials are included in what you paid to the service provider? You can break those out, by completing the 1099 for only what the service was. However, you’re not required to – if you have all costs posted to the same account in your accounting software and aren’t sure which are materials and which are services, send a 1099 for the entire amount. It’s the provider’s responsibility to deal with that on their own tax return, and it’s rather easily done.

Cash or accrual? CASH. You 1099 someone for the amount you physically paid them during the year. If they billed you another 100 grand but at year end it’s still on your books as a payable, it doesn’t count. That’ll be for next year.

Rents? If you’re paying rents, you’re also required to include rents paid on a 1099. There’s a separate block for rent paid.

When: 1099’s are due out by January 31st, so the sooner the better. The filing for the feds comes later, but you must have the 1099’s out to the recipients by January 31st.

How: There are so many options for how that I’m not sure we can cover them all at once. You can print them from your accounting software. You can order free forms from the IRS, and print them on those, though if you haven’t ordered your free forms by now, you won’t have time. You can buy forms at the office supply store. You can file online with various providers who will mail the forms for you and efile with the feds. This is my favorite, especially if a company only has 1 or 2 1099’s. I use filetaxes.com, but there are other options.

Red forms or not? IRS regs require that the 1099 and the 1096, which is the summary that goes to the IRS with their copies, be printed on their red forms. This is why the forms purchased at the office supply store come with red copies. However, I know people who’ve been printing them on plain paper with black ink straight out of their software for years, with no problems and no complaints from the IRS. Yet another reason why online filing is so great – there’s no need to worry about it.

Why? It’s the IRS. You want I should have an answer for what they do? But the short version is, the IRS wants to be able to check to see if someone’s reported all their income, and one way they do that is by checking 1099’s against the person’s tax return. So in completing 1099’s, you’re helping the government collect on taxes! That should give you a warm fuzzy feeling about doing it. There IS a penalty for not doing them by the way, should they happen to find out you didn’t do it.

Another warning on 1099’s: This year I’ve seen an increase in the number of business owners who refer to service providers as “1099 employees.” There is no such thing. You either have employees, or you have subcontractors. Do not confuse the two. Just saying someone’s a subcontractor so you don’t have to pay payroll taxes doesn’t work either. There are guidelines to follow, and if the IRS finds out you’ve misclassified an employee as a subcontractor, the penalties will be steep – not to mention the back payroll taxes. Not to mention your state – if they catch wind of it, back payroll taxes and penalties will mount up quickly. All it takes is one dissatisfied “1099 employee” to bring up the issue, so please don’t do it.

There’s so much more to 1099’s than I can cover here, so if you have questions about 1099’s, ask one of us who knows. We’re awash in 1099’s and W-2’s right now, and we’re not unfamiliar with the process!

82 comments:

  1. Apparently there are quite a few of us "writing" accountants lingering around in the blogging world! (althought I don't do tax...I'm more of the healthcare consulting type of accountant)

    I just wanted to stop by and say hello!

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  2. So what do you do if, a subcontractor refuses to provide a W-9 after receiving payment for a service?

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  3. If they refuse to provide a W-9, you issue one, with "Refused" in the Tax ID box, and you send it off to the IRS and subcontractor as usual. Then it's up to the IRS to sort out with the subcontractor, but you've fulfilled your responsibility.

    Thanks for asking!

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  4. Correction...you can't use your own paper to print the 1099's. You must print on the IRS issued forms as anything else won't be scannable by the IRS.

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  5. Question: My brother in law wrote a book last year and had it published through the company he works for and partially self published. He asked my husband to help out and gave him some money for the hours of time my husband put into it. Today (April 5) he asks for my husband's SSN so he can file a 1099 on his taxes. First, he has not submitted a 1099 by 1/31. 2, we have already done our taxes and since my BIL is not an INC or LLC I did not claim it as income, it was a gift for time. 3, I don't trust my BIlL because of his history not to steal my husband's identity if he gets a hold of his SSN. He has taken out credit cards from his parents accounts, used the family business credit cards for his own personal use and let his parents take the hit, etc. etc.

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  6. I forgot to ask my question - it is: are we required to give him my husband's SSN so he can issue a 1099 under his personal taxes, 3 months after he was supposed to?

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  7. Grace,

    This is tricky. The reason your BIL wants to send a 1099 is so he can claim the deduction on his taxes. If he paid your husband more than $600, he's technically required to file a 1099, even if it's late. It doesn't matter if your BIL is an Inc or LLC -- what matters is if you are or not, and since you're not, he is supposed to provide one.

    However, given that you don't trust your BIL and you don't have a EIN that's not an SS, I'd be hesitant to provide it, for sure.

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  8. So even though he wrote a personal check, which is considered a gift because my husband helped him out , it's considered required for a 1099?

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  9. Technically, unfortunately, yes, though since this is family and the terms weren't established at the time, that this was a service, and given that you don't trust your BIL, you could refuse to provide it so he doesn't get his hands on it. His option then is to submit the 1099 to the IRS with "refused" in the ID block, and it's then up to the IRS to contact you about it. At that time you could work it out with them, leaving the BIL without access to your SS.

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  10. Question: We are a General Contractor and had a company build and install cabinets at one of our customers buildings. He is refusing to give us a w9 stating that he is a vendor. We have not sent him payment for the service. What is the best way for us to proceed without his W9?
    Thank you, Natalie

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  11. Hi Natalie. Since the work has been done already, and he's refusing, he's subject to backup withholding at 28%. You can tell him that without the W9, you're legally required to withhold 28% from the payment and remit that to the IRS. When you submit the 1099, write "Refused" in the TIN box. He's also subject to a $50 penalty for failing to withhold, in addition to the backup withholding. The backup withholding usually ensures they provide the info!

    If payment had already been made and he refused, at year end you'd submit the 1099 with "Refused" in the TIN box and let the IRS sort it out with him -- which would happen with option 1 also.

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  12. Monique,

    Thank you very much for the advise.

    Natalie

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  13. Question: I work in a healthcare setting where we pay physicians for actual medical services and also for consulting. Would the consulting, perhaps non patient related, such as how to run or direct a department, done by a physician be considered a medical payment and go in box 6? or should it go in box 7 ? Thanks

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  14. That's a tricky one! I'd probably opt for putting it in Box 7, since it's not for medical services rendered, but more of what sounds like consulting.

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  15. I have a subcontractor who has not provided a ID or social and also don't have a W-9 in order to pay this subcontractor. How can I pay the wages due without the necessary documents?

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  16. Hi Rich,

    You shouldn't pay them again until they provide the necessary W-9. To report at year end, file the 1099 as you normally would, but enter in "TIN REFUSED" in the box for their taxpayer ID number. This gives the problem to the IRS -- they can take it from there. They may request withholding on future payments if the sub does not provide this info.

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  17. so in order for me to pay them at all do I need ID, social, and W-9? I don't want to be responsible to pay their taxes and at the same time I received a call from a homeowner who has been harrassed and told that they are going to file a lien on the property. How do I protect my company without paying their taxes and also stop the threats of the property from a lien?

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  18. Rich,

    Here's what I'd do, to protect both you and the homeowner, since the sub is not cooperative. Pay them, and get that over with so you and the homeowner can rest easy about that.

    In January, file the 1099 with the feds as required, and enter "TIN REFUSED" in the ID number block. Since they've already done the work, that'd be the best course of action, and the one that's going to cause you the least problems. You've done your due diligence by requesting the info from them, and by filing the 1099 with the feds, and after that it's up to the feds to follow up. After that, it's between the feds and the sub.

    In the future, ask for the ID number upfront, and if subs don't want to provide it, let them know that it's the law, and without it, you're required to withhold 28% for taxes. (But don't worry about that now, for heavens sakes.) That usually brings them right around.

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  19. okay great now I need to find a address for them to send the 1099 right? Without it I won't be able to provide the Fed's with nothing but a name but no address to mail to. Wow this is just getting better by the minute! I live in colorado do you have any recomendation for a great accountant. I am in great need!

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  20. Well, yes, an address would be helpful. Do these people show up in the dark of night and disappear when the sun comes up? Call me at 425 772 6218 and we'll see if we can figure this out.

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  21. And yes, I know a fabulous accountant -- me! I work remotely all the time. However, I do know some good Colorado accountants too.

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  22. i work for a pool builder. what about payments made to propery owners associations or homeowners associations for permitting?

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  23. They're corporations, right? Then no 1099's needed.

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  24. So thankful to have come across your blog. I have a few questions (never blogged before or answered to any blogs-fyi). I'm anticipating a profitable year in my company. Yeah, I've made some money before but mostly my business supports my way of life and not much more. With a General Contractor License, alot of my employees will be tradesman and laborers. I may or may not be be using their services on a regular basis. They will not be regularly employed (specified work hours or days) and they will not be controlled by my company (free to work for others or independantly). Can I hire these tradesman and laborers as a 1099 employees?

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  25. Do they have their own insurance and business license? If so, you can definitely use them as 1099 vendors. (Try not use the word employee along with 1099 -- it confuses the issue should anyone be looking into it.) If they don't have their own insurance and license it becomes a little more iffy.

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  26. I'm a bookkeeper for a large family farm. We hire multiple companies to haul our product during harvest. They have provided a service for us; Hauling. Do I issue them a 1099? I have W9 on all of them. Some say they are incorporated, some say individual/sole proprietor

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  27. If they say they're incorporated, don't worry about them. I would issue a 1099 for the others though.

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  28. Thank you. Do you know if hauling was ever exempt from 1099?

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  29. You're welcome. Not that I know of.

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  30. Do you know if there is a free download available to print 1099's?

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  31. Section 6109 of the Internal Revenue Code requires an independent contractor or vendor to provide their correct TIN to any business entity that must file a 1099-MISC with the IRS for payments made. A company is not required to file 1099-MISC forms for contractors or vendors unless they were paid $600 or more during the year.

    The W-9 form, in addition to supplying a TIN, allows the contractor or vendor to claim exemption from backup withholding taxes being deducted from what they are paid. A business must request a W-9 if they are going to comply with the backup withholding requirements and avoid a penalty for filing a 1099-MISC with a missing or an incorrect TIN.

    A payee must furnish a certified TIN on Form W-9 if they are to receive payments in the form of interest, dividends, or payments that are subject to broker reporting. For all other payments, the payee may simply provide the paying entity with their TIN, in any manner that they so choose.

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  32. What do you do if you have a vendor that you paid that you did not get a W-9 and have not contact information for.

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  33. You still submit the 1099 to the IRS with the information you have, and in the block for their ID number you write "Refused." This takes care of your obligation and the IRS can deal with the vendor as they see fit.

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  34. If a company is working for us, and we make out the check to the owner personally, do we send a 1099 with the owners name along with their TIN# or do we have to use their social security number? I have an owner who refuses his ss # but will give me the tin #. I assumed that I needed his ss # if the checks were made out to him, and not his LLC. Thanks!

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  35. My accountant/bookkeeper who is an LLC, we pay a monthly fee to do our books & taxes, is stating that they don't have to fill out the W9. He stated that there is no reason to do the 1099. We are also an LLC and did pay them over $600 in services for this calendar year. From what I understand I should issue them the 1099 "REFUSED TIN". What do you think? Thank you!

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  36. Some people are opposed to the concept of 1099's. Still, it's the law, so there is that. Yes, you should issue the 1099 with REFUSED in the TIN block.

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  37. MOnique Thank you for the advice!

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  38. I'm an individual who fell victim to the downturn in the economy and got laid off from a previous job in the Audio Video industry. I ended up going on unemployment, and I did some contract work through out the year. In August I picked up a full time job. I have my W-2 for my full time, and the W-2 for the unemployment. I only received a few 1099's. What happens if I file my taxes and I get another 1099 in the mail afterwards...?? Will I get penalized for not waiting till I get them all. I'm not even sure I'll be getting more at this point. But I'd like to know what to expect for repercussions...

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  39. Here's the deal Anon -- you're supposed to file for all income, whether you receive a 1099 or not. So if you file that way, by including all income you earned and could conceivably receive a 1099 for, you'll be good. I don't get 1099's for all my income, but I report all of it whether I get a 1099 or not.

    If you file and don't include income that you are 1099'd for, and the IRS can match it up and see that you didn't include it, they'll send you a letter and say, "Hey, what's up? You owe us more money." Not that they'll say it just like that -- they're more formal. Then they'll tell you how much more you owe, and you can either pay up at that time or dispute it, or do an amended return. That's the worst thing I've seen happen when all 1099 income isn't reported.

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  40. I have a family member that worked with a friend of hers as assistant for a household.....cleaning, errands, pet care, child care, bank deposits. She was paid cash.
    No time card, no signed receipts and thought she would help her friend a couple of days a week part time while she was looking for full time work. It was inconsistent work, sometimes 2 days a week, sometimes 3 sometimes no work yet 6 months after leaving her friend requests a w9? My family member doesn't have proof of amount given to her or proof of hours worked, what should she do now in light of this? She rcvd w2 stating amount paid was $6500 in a 7 mo period in TN? Her friend asked for her SS# 6 months after she had stopped helping her. My family member trusted her and gave it to her. My family member is concerned about amount her friend claimed she was paid. She did not receive that amount. Help she needs advice. Thank you.

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  41. That's a tough one. If they've reported this to the IRS, your family member needs to call the IRS and state that this income was not for the amount they claimed. However, then they're going to ask her how much it was. I'd go straight to the IRS with this one, because if it's been reported to them, they are going to assess self-employment taxes on this amount -- work with the IRS to get this straightened out. They may then go after the friend for filing a fraudulent information return.

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  42. I file a Schedule C as a sole proprietor. I have a contract with a non-profit organization that provides financing for products I manufacture. When I sell the product, I repay them the loan. They loaned me money 9 times this past year. I repaid the first 8 loans in full but not the 9th because that loan was made at the end of the year and I haven't sold the products yet. Now they've surprised me by issuing me a 1099-MISC and characterizing all 9 of the loans as self-employment income to me in Box 7. They even included the 8 loans I already repaid them! I'm worried the IRS will think I really earned all of this loan money, which exceeds the revenue I took in because of the 9th loan, which was the largest one. I don't know what to do. It's not income to me and I don't think I should pay self-employment tax on it. I told them all of this and they refuse to correct the 1099. They say since there is no guarantee that they'll be repaid, it's not a loan, and that they must report all payments to me on a 1099-MISC. What do you recommend I do?

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  43. Ah, the trick income. You do have to list the 1099 income on your Schedule C, but then you deduct it right back out. I would put in Part V -- and call it Repayment of Loans. As long as you can explain it, should anyone ask, this works fine.

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  44. Thanks, and this could work for the first 8 loans, but the last one was the largest and was made the last week of the year, so of course I haven't yet paid it back yet. As for the first 8 loan repayments, I have copies of my checks written to them. Should I get some kind of statement from the organization acknowledging the repayment of the loan? I'm still confused about how to handle the 9th loan. I can't expense it in Part V because I haven't repaid it yet. I wouldn't have accepted it if I knew they'd characterize it as income to me. Thanks for your advice.

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  45. Copies of your checks are fine.

    The last one is trickier, and is a timing issue. Having 1099's that don't match income is common because of timing. I'd put that on a separate line in Part V, and call it Loan Repayment Due - because it is a loan repayment that's due.

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  46. Hi, I just thought I'd follow up with further advice I got about these loans. Because they are fairly large, totaling as much as a full year of my income, my accountant thought putting them in Part V might not go unnoticed by the IRS, especially because Loan Repayment Due isn't a legitimate business expense. His preference was to add all of the loans to gross income and then likewise add that amount to COGS. This way the bottom-line net profit is accurate. Thanks again for your advice.

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  47. I received a 1099 back from a vendor where they marked LLC but didn't indicate tax status (C, S or P) Do I just assume they are not a corporation or will this need to be clarified by them? If I send them a 1099 and they are a corporation is there a penalty for me?

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  48. I'd assume they're not a corporation, since that's the more likely option. If you send them a 1099 and they ARE a corporation, no big. No penalty for you at all, so better safe than sorry!

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  49. I am a New LLC and recently just started to hire Sub contractors one of which is incorporated and the other that are not to perform different services for my company i have the W-9 for both filled out and complete. But usually when the jobs are done they either give me the amount i owe or what i have to pay for services rendered. i either write a check out to them or pay by cash i made the mistake of not asking for receipts or invoices for the services and im getting all my affairs in order come tax time January to make sure i file the correct paperwork for both Misc-1099 or any paperwork needed to comply with IRS regulations what should i do??

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  50. You don't need receipts or invoices from them. You have a record of what you paid them, either by cash or check, and from that you can issue 1099's. The corporation doesn't need to be issued a 1099. I like filetaxes.com for filing 1099's when there are only a few -- they take care of the mailing and filing with the feds.

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  51. I was on unemployment compensation all last year and still am. For the month of July last year I sublet my apartment to someone who had his company issue the rent check. Now, January 2011 the company want me to fill out a W9. I am worried that I will get into trouble with unemployment. I did not work for this company. This was not earned income as far as I was concerned in terms of having to let the unemployment office know on continued claim form that I had "earned" money. Do I have to fill out a W9 form for this - and if I get issued a 1099 - will the unemployment office come after me to pay back the amount of money that the rent check totalled.

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  52. They should issue the 1099 with the income as Rents, not Other Income. If you don't fill out the W9, they can still submit it with "refused" in the SS block, which means it's then up to the IRS to deal with you. Other than that, I can't comment on whether the unemployment office will care if you have rent income or not.

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  53. My husband owns his own contracted business. He hired a friend for one time that was supposed be $150 but has used him multiple times now and paid out over $600 to him. This "friend" now refuses to provide a w9. What do we do?

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  54. Lots of great advice Monique! My accoutant is a Corporation. This means I do not have to issue them a 1099, correct? Just wasn't sure if accountants were under the same rules as attorneys where you have to issue a 1099 either way. Thanks!!

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  55. Thanks! Nope, no need for a 1099 then. It's only attorneys who are soooo special!

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  56. Hi Julie, You can submit the 1099 with "refused" in the EIN box. Then the IRS can deal with the "friend."

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  57. I understand you do a 1099 for rent but do you also do it for a security deposit paid to a rental agency?

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  58. The software that we use does not allow for "refused" in the 1099....it is programmed to ask for numbers. How do we file this form?

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  59. We have a vendor in question who has said they are Inc, but its an individual who provided service. Do we go ahead and issue a 1099 and if they are incorporated they don't need to report that, or just not issue one and hope that they are correct on their W-9 info? Is it better to over issue, then not issue if there is a question?? Thanks!!

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  60. How many copies are sent to the 1099 recipient and which ones do I send them? I know the red copy goes to the IRS, but do I send our 1099's 1 copy of Copy B, I copy of Copy 2 and 2 copies of Copy C??

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  61. Copy B and Copy 2 to the recipient. Red copy to IRS with 1096. Copy 1 to the State Tax Dept, if required. Copy C for your file.

    I know. Their numbering system is . . . apparently put together by committee.

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  62. We are a small builder and have sent 1099s every year for over 30 years. We had no work this year. Should I send a 1096 with a 0 amount on it?

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  63. Oh, I'm sorry to hear that. No, there's no need to send a 1096 if you don't have any 1099's.

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  64. What can I do for some missing vendors for 1099-misc after report to IRS on February 28? Could I go ahead to send the missing 1099misc & another 1096 to IRS? Do my company have a penalty for this? This is a first time I do for 1099s. Please help. Thank you.

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  65. I OWN A SMALL CONSTRUCTION COMPANY AND AM IN THE HABIT OF ISSUING 1099'S. LAST YEAR I HAVE A SUBCONTRACTOR WHO LENT ME MONEY ON SEVERAL OCCASIONS WHICH I REPAID IN FULL. HE SEEMS TO THINK THAT THE PAYMENTS I MADE TO REPAY THE LOANS SHOULD NOT BE 1099'D. I WAS UNDER THE IMPRESSION THAT THE LOAN PAYMENT WOULD BE TREATED THE SAME WAY OR SIMILARLY TO MATERIALS A SUBCONTRACTOR PURCHASED AND BILLED FOR. HE WOULD SIMPLY DEDUCT THE LOAN PAYMENT TO ME AS SUCH (COGS) AND TAKE THE LOAN PAID TO ME AS A DEDUCTION THE DIFFERECE BETWEEN THE TWO WOULD BE INTEREST PROFIT EARNED AND IS TAXABLE. IS THIS CORRECT AND IF SO WHICH LINE OF THE 1099 SHOULD IT GO ON?

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  66. In June 2011, I borrowed $200K from a wealthy friend to buy 14 acres of land. The land cost $128K and I got $72K to clear and develop the land. He asked that I work with his lawyer and deed the property over to him immediately to hold as collateral. The lawyer kept the $200K in escrow until the closing. I never received the $120K personally. The $72K was deposited in my account and was used to do work on the land. I personally added additional money to the $72K to do work on the land. I have receipts for the work performed. The lawyer prepared a written loan agreement between my friend and I. The agreement contained the borrowed amount, added interest and a due date. I considered the borrowed money as a loan and I would receive the deed back once the loan was paid.
    Well, my friend's lawyer provided the IRS a
    1099-S for $200K. In the IRS eyes it appears that I had a capital gain of $200K in 2011 and I was taxed as if I had. I'm currently in a installment program to pay off this debt. The lawyer who prepared the 1099-S refuses to change or pull back the document.
    What can I do if anything? Is my case worth pursuing? My funds are running low and I may not have enough to pay a lawyer.


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  67. I'm no lawyer, or expert, but a 1099-S would seem to indicate that you received the 200k and don't owe it. If you borrowed the 200k, you should not have received a 1099-S. I would contact an EA or CPA to determine how best to correct this with the IRS, if indeed that's what's called for, which it does sound like.

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  68. Monique,

    Thanks for your quick response.

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  69. Sure -- if you need a reference to an EA or CPA who can help you answer those questions, let me know. I know some excellent ones.

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    Replies
    1. I'll accept anyone you care to provide.
      Thanks

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    2. Lori Thompson: http://www.ktjtax.com/ -- She may be able to clear it up with an amended return. And she's awesome. She's unable to get back to you today, but she can definitely help.

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    3. Thanks for your time and assistance. Have a Happy Thanksgiving.

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  70. We issue a 1099 to an LLC that we rent a billboard from. Last year we rented a new billboard from a new LLC that required a deposit. Do we include the deposit amount on the 1099 and if so how do we handle that once the deposit is returned in 2014? Thanks very much for your help!

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  71. Please help. I am rehabbing a house and employed a contractor and a project manager to help me. Most funds went through the PM and then to the contractor. One check went directly to the contractor. The PM fee is separate. Both are LLCs. Ultimately the total went to the contractor. He will not accept a 1099 for any amount other than the one check paid directly to him. And he refuses to provide his tax ID. I have emailed, texted, called. A.) What do I do about the no tax ID and I have 4 out of 6 like that.. B.) Shouldn't the entire amount paid for the contract go to the contractor on a 1099? Or should I send the PM a 1099 and then have him send a 1099 to the contractor?
    $10K in draws to Contractor directly
    $20K in draws to PM who then paid the contractor?

    I read escrow agents are responsible for filing but the PM isn't really an escrow agent.
    I also read somewhere I had to file an affidavit stating they refused to provide tax ID
    I want to cry. Please help.....

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  72. Don't panic! If they refuse to provide the tax ID #, all you have to do is write "refused" in the block for tax ID on the form. You should 1099 the contractor for the amount you paid directly to him, and 1099 the PM for the amounts paid to him -- if part of that was the contractor's, that's his responsibility to adjust for that or send out his own 1099's. No affidavit required -- you can just write on the forms. Then the IRS will deal with them, and they'll have to explain it. All you can do is work with what you've got, and if you provide the info you can, you have nothing to worry about.

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  73. Thoughts on this - What happens when business A makes a sale to business B. Business B re-sells the product at cost and then receives a discount from business B as a commission. The commission is never paid in cash but is still essentially paid. Is a 1099 required to be issued?

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  74. meant to say Business A gives the discount in the form of a commission.

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  75. Is it a commission or a discount on product? Does it show on the books as cost of goods or as commission? That will determine if a 1099 is needed.

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