1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

File a 1099-MISC to someone who doesnt have a LLC?

Discussion in 'Business & Tax Advice' started by dexxtaa, Mar 4, 2014.

  1. dexxtaa

    dexxtaa Regular Member

    Joined:
    Oct 4, 2012
    Messages:
    394
    Likes Received:
    178
    Hello!

    I have my own sole proprietorship, and its tax season. This is my first year doing this, so its all very confusing. I talked to my tax guy, and he explained that for expenses, If i paid someone $600 or more, I need to fill out a 1099-MISC. My business is centered around reselling.

    How do I File a 1099-MISC on a seller here on bhw that doesnt have a legal identity and/or doesnt live in the US?

    I was told if i just placed $20k in the Misc section of the expenses that would be a red flag by the IRS and could very easily cause a audit.
     
  2. evilclown

    evilclown Senior Member

    Joined:
    Jul 31, 2012
    Messages:
    805
    Likes Received:
    575
    Occupation:
    Party Clown
    Location:
    Clownville
    You can actually now days deduct investments on marketing, and a website and online marketing are consider now marketing channels. Ask him about it. They did on mine. I deducted even web hosting, domains and other things. If they are actually promotional.
     
  3. dexxtaa

    dexxtaa Regular Member

    Joined:
    Oct 4, 2012
    Messages:
    394
    Likes Received:
    178
    Thanks for the Swift reply Evilclown.

    Just so im understanding correctly,

    1. ) I've paid fiverr over 600 dollars for reselling. I can deduct it via a marketing channel?
    2. ) I 've paid someone who doesnt file taxes, I can place the expense under marketing/advertising?

    Thanks so much for all the help. really really appreciate it.
     
  4. taxhit

    taxhit Junior Member

    Joined:
    Jan 13, 2008
    Messages:
    110
    Likes Received:
    31
    If the person or entity that you made the payment to is located outside the U.S.(I am assuming you are living in the U.S.?) there is no requirement to file a 1099-misc. By the way, the filing of 1099's were due back at the end of January.

    Not sure what you mean by the 20k in the misc section triggering an audit. You mean triggering an audit on you because you payed this vendor 20k?
     
  5. Pornguy

    Pornguy Regular Member

    Joined:
    Nov 29, 2012
    Messages:
    320
    Likes Received:
    106
    Home Page:
    You should have had them fill out a w-9 before you ever paid them. Its required that you have that on file. And they must provide you with a tax ID number either a social security number (personal) or a company EIN number. You must send anyone who earned over $600 in the tax year a 1099-misc and fill out a 1096 with the IRS showing everyone who was paid. So be sure you do that. Otherwise you must claim all that as income and that will be a big problem.
     
  6. dexxtaa

    dexxtaa Regular Member

    Joined:
    Oct 4, 2012
    Messages:
    394
    Likes Received:
    178
    Yes, I am living in the United States.

    Lol i had no idea about the 1099's being due Jan 31st - Lesson Learned.

    With the 20k Misc triggering an audit, The H&R guy was breaking down my expenses. My expenses were 20k. He's trying to place the 20k expenses in the correct "category"

    He claimed I had these 2 options :

    1. Place the 20k in the "commissions" section. If he did this, it would cause 1099's to be placed on anyone i paid $600 or more (who is within the US, right?)
    2. Place the 20k expenses in the "uncategorized/misc" section (which would throw the red flag up).

    To be clear, the payments were for the services to be completed.
     
  7. taxhit

    taxhit Junior Member

    Joined:
    Jan 13, 2008
    Messages:
    110
    Likes Received:
    31
    Actually, that only applies to U.S. based entities.
     
  8. taxhit

    taxhit Junior Member

    Joined:
    Jan 13, 2008
    Messages:
    110
    Likes Received:
    31
    That only applies to U.S. based entities
     
  9. taxhit

    taxhit Junior Member

    Joined:
    Jan 13, 2008
    Messages:
    110
    Likes Received:
    31
    I need more details. Add my on Skype "texas1167" and I will try and help you out.
     
  10. Pornguy

    Pornguy Regular Member

    Joined:
    Nov 29, 2012
    Messages:
    320
    Likes Received:
    106
    Home Page:
    If they are non- US resident then you must have them fill out a w-8 BIN. Trust me, I pay thousands of contractors each year. I have a CPA do my taxes each year, because my company taxes are so complex.