Might be old news for some, but I just heard about it. For those that do cue work as a business. If I understand correctly, This tax season, you will be required to provide the IRS a 1099 for every vendor that you spend $600 or more with. Just a heads up.
Tax FYI
- Thread starter sliprock
- Start date
It's possible that you have your info misconstrued.
You receive a 1099 from your employer when you are the contractor.
You receive the 1099 as a statement of your income for the year from that particular employer. Vendors that you purchase mtrls. from do not send out 1099s to those that purchase from them.
You do want to keep track of the cost of mtrls. purchased because those are tax deductible. You can ask for a statement from those suppliers so you will have a year-end total of mtrls. purchased.
However, you are required to pay the sales tax on your work once it is sold. Do you collect the proper sales tax? You also pay income tax on the money received from the buyer, minus the cost of mtrls.
You receive a 1099 from your employer when you are the contractor.
You receive the 1099 as a statement of your income for the year from that particular employer. Vendors that you purchase mtrls. from do not send out 1099s to those that purchase from them.
You do want to keep track of the cost of mtrls. purchased because those are tax deductible. You can ask for a statement from those suppliers so you will have a year-end total of mtrls. purchased.
However, you are required to pay the sales tax on your work once it is sold. Do you collect the proper sales tax? You also pay income tax on the money received from the buyer, minus the cost of mtrls.
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You may be right KJ. A quote from the article I was reading.
"The new rule, set to take effect in 2012, will expand such reporting to include payments to companies, and for goods as well as services. That means businesses will need to get tax ID numbers and file forms for almost all suppliers—and track all their small expenses to see which vendors meet the threshold. Spend $600 on cell-phone service, at FedEx, or fueling up at the local gas station? Better get their tax ID number. Buy new computers? File a 1099."
The entire article can be read here...
http://www.businessweek.com/smallbiz/content/may2010/sb20100526_855178.htm
