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

dexxtaa

dexxtaa

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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.
 
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dexxtaa said:
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.
Click to expand...

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.
 
evilclown said:
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.
Click to expand...

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.
 
dexxtaa said:
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.
Click to expand...

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?
 
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.
 
taxhit said:
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?
Click to expand...

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.
 
Actually, that only applies to U.S. based entities.
 
Pornguy said:
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.
Click to expand...

That only applies to U.S. based entities
 
dexxtaa said:
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.
Click to expand...

I need more details. Add my on Skype "texas1167" and I will try and help you out.
 
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.
 
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