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1099 for SEO?

Discussion in 'Business & Tax Advice' started by coop99, Jul 7, 2011.

  1. coop99

    coop99 Junior Member

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    If I pay a company every month to do SEO work for me, are they considered Independent Contractors and I need to file a 1099 for them?

    Or is that just considered a business expense for me?
     
  2. jonnyquest

    jonnyquest Regular Member

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    Should be simply an expense. I think where people get in trouble is when they get someone to work for them exclusively and pretend they are in IC.

    If it is a legit company you should be OK ... but since this is not legal advise check with an accountant

    JQ
     
  3. BorisTipsIt

    BorisTipsIt Regular Member

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    If it is a sole proprietor, you need to 1099. If they are a legit corp or LLC, you don't.
     
  4. alexja83

    alexja83 Registered Member

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    I have been filing that as an expense on my 1099
     
  5. coop99

    coop99 Junior Member

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    That's interesting. Why does it make a difference how the link builder has his business structured?
     
  6. vrodriguez305

    vrodriguez305 Junior Member

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    Its an expense. The SEO company will themselves file their own 1099 or whatever.
     
  7. ostermeier

    ostermeier Newbie

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    If you paid them more than $600 for services you need to file a 1099 for them. There are also other cases.
    see < irs site > /pub/irs-pdf/i1099msc.pdf for current rules.
    (can't post links yet.)
     
  8. BorisTipsIt

    BorisTipsIt Regular Member

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    Congress is strange. Corps and LLCs with own tax ID numbers don't get 1099s for some reason. Not sure why, but they were going to change it in 2012 to anyone that you paid more than $600 to in a fiscal year. This would mean if you bought a laptop you would have to 1099 the store that sold it. Freaking bizarre. Think they repealed it after businesses threatened to release the hounds.

    In short, I don't know. CPA tells me what to do. I walk in to go over my taxes and usually walk out with no clothes or wallet. Wish they would at least buy me dinner before fucking me over!
     
  9. buck90

    buck90 Junior Member

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    i got hit with a 40k fine a couple of years ago by the irs.

    basically what i found out was if some one is a independent contractor i could not furnish tools, a truck, tell them when they had to be at work, or pay them by the day.

    you can tell them when the job has to be done by and there has to be a lump sum total for the work they do.

    you need to have a invoice for the work they completed so in case you get audited you are good.

    don't get me wrong i think we should get the gov by the short and curlys ever time we get a chance but cover your ass they don't play.
     
    Last edited: Jul 16, 2011
  10. BHopkins

    BHopkins Moderator Staff Member Moderator Jr. VIP

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    My accountant makes me fill out 1099's for everyone I pay more than $600 to.
     
  11. TrafficJunky

    TrafficJunky Junior Member

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    Yes, usually by law.
     
  12. jonnyquest

    jonnyquest Regular Member

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    This about says it all .... learn something new everyday .... this keeps people from cheating on their taxes because now the IRS knows you received fees for your SEO work but you can now legit deduct the expenses of out-sourcing our SEO work.

    JQ

    ----------------------------------------

    A 1099-MISC needs to be issued by your trade or business under many situations when you pay someone for rent, services, royalties or other various fees.

    1 Determine if you have a trade or business. If you are operating for the purpose of making a gain or profit, you have a trade or business.

    2 Determine if you run a nonprofit organization, a taxable farmers cooperative, a government agency, or a trust of a qualified pension or profit-sharing employer plan. These are considered trades or businesses for 1099-MISC purposes.

    3 Calculate if you paid $600 or more during the tax year in the course of your trade or business to an individual or partnership. Professional fees to an attorney, doctor or other professional are included. Payments to corporations are included only if they are for medical, health care, legal or fishing activities.

    4 Calculate if you paid $10 or more in royalties.

    5 Issue 1099-MISCs if you have or manage a trade or business and have paid $600 or more to an individual or partnership (or certain corporations) or have paid $10 or more in royalties.

    6 Issue a separate 1099-MISC to each individual or partnership (or specific corporation).

    Tips & Warnings

    Do not send a 1099-MISC to someone when you have made a personal payment to him. An independent contractor to whom you have made a personal payment unrelated to your trade or business does not receive a 1099-MISC.

    Do not send a 1099-MISC to an employee. That is what a W-2 is for.

    An independent contractor receives a 1099-MISC only if you pay him in the course of your trade or business.

    A household employee who is not an independent contractor should be issued a W-2 by the employer. The employer must also fill out a Schedule H.

    The general rule is that you do not have to send 1099-MISCs to a corporation. The exceptions to the rule are for medical, health care, legal and attorney,
    and fishing related payments.

    Landlords are now being required to send 1099-MISCs to payees in order to deduct these expenses. This means, too, that even small sole proprietors are required to send landlords 1099-MISCs in order to deduct office rent.

    Payments Requiring 1099-MISC
    Steps

    1 Determine that you paid $600 or more in compensation for services rendered by a nonemployee to your trade or business. Include the gross amount of payments in box 7, including anything you paid the contractor for supplies and materials.

    2 Determine that you paid $600 or more in rent for office space, machines, equipment or land in the course of your trade or business. Write the amount in box 1. Do not include amounts paid to corporations or real estate agents.

    3 Verify that your trade or business gave any prizes or awards to an individual who is not your employee. Include only amounts of $600 or more. Put amounts in box 3. But don't report it if the prize was transferred directly to charity.

    4 Verify that your trade or business paid $600 or more in medical or health care payments to an individual, partnership or corporation. Put the amount in box 6.

    5 Verify that your trade or business paid $600 or more to an attorney or corporation for any legal services. Write the amount in box 7. If you cannot determine the amount paid that applies to legal services, write the gross amount paid, even if less than $600, in box 13 and put the letter A after the amount.

    6 Determine if you paid $600 or more in taxable fringe benefits to nonemployees in the course of your trade or business. Write the amount in box 7.

    7 Determine if your trade or business paid $600 or more in punitive damages. Write the amount in box 3.

    8 Determine if your trade or business paid $600 or more in director's fees. Write the amount in box 7.

    9 Determine if your trade or business paid $600 or more to a deceased employee's estate or beneficiary. There are some tricky rules on this one, so be careful and get some help. Write the amount in box 3.

    10 Verify that you paid $600 or more for your trade or business to purchase fish from an individual, partnership or corporation. Write the entire purchase cost in box 7.

    11 Verify that you paid a share of fishing boat receipts to someone. The rules are quite tricky on fishing boats, so see a tax professional. The amount is written in box 5.

    12 Verify that you paid royalties of $10 or more in the course of your trade or business. Write the amount in box 2.

    Tips & Warnings

    If you pay someone as an independent contractor who is, in reality, an employee, you can be liable for penalties. Even worse, you can be liable for some of his taxes! An employee is to be paid using the system of a W-2, which includes withholdings for Social Security and Medicare taxes.

    Sources: http://www.ehow.com/how_13664_know-issue-1099.html
     
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