Questions on 1099-MISC?
Questions on 1099-MISC?
We own a small business. We are in the process of preparing for taxes. Couple of questions on 1099.
1. Do we need to issue a 1099 to a car repair shop towards repair expenses of our company car (expenses > $600)?
2. Our payroll was handled by a payroll service company. Do we need to issue a 1099 (expenses < $600)
Answers:
Chosen Answer
Anna S: 1. If the repairs are paid to an individual (not a corporation) and the repairs were labor intensive (i.e., the parts were incidental to the repairs), then yes a 1099 is required, otherwise, no 2. Since the amount of the services was less than 600, then no, a 1099 is not required (yes if the total is more than 600.)
2009-01-19 13:30:06
Anna S: 1. If the repairs are paid to an individual (not a corporation) and the repairs were labor intensive (i.e., the parts were incidental to the repairs), then yes a 1099 is required, otherwise, no 2. Since the amount of the services was less than 600, then no, a 1099 is not required (yes if the total is more than 600.)
2009-01-19 13:30:06
hrblockerrolquinn: Dear nr1974: I am not sure I got all of the question but you are correct in that $600 is the trigger for a 1099. It sounds like the 2 items you listed are expense items which should be covered on Sch C as a business expense rather than a 1099 report.If you had an independent person work for you and you did not cover them on your payroll you would issue a 1099 to them.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
2009-01-19 13:30:58
2009-01-19 13:30:58
Richard K: You need to issue 1099-Misc to individuals to whom your business paid $600 or more.
If the care repair shop is a sole proprietor, then you should issue them a 1099, If they are a corporation or LLC or some other legal entity, then no 1099 is needed. If you are using the standard mileage allowance to calculate your allowed vehicle expense deduction, then no 1099 should be needed, because you are not going to deduct the actual expenses on your tax return.
The payroll service was paid less than $600, so no 1099 should be needed.
Richard K
This advice is based upon our understanding of the law in effect at the time it was written as it applies to the facts described by you. See my profile for more information.
2009-01-19 13:32:00
2009-01-19 13:32:00