# Just received a 1099-MISC from a customer



## thutch15 (Sep 8, 2008)

I just received a 1099-MISC for $2868.72 from a customer. I was under the impression that this was for income paid to a nonemployee. I sold them goods and I don't see how that relates. If that is the case then I would think every business would be sending out 1099's and I would be flooded with them. 

Has anyone else ever received one of these for selling a product?


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## nottypical (May 1, 2009)

You get those for companies that you fill out a W-9 for. I get one for one of my clients.


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## FatKat Printz (Dec 26, 2008)

thutch15 said:


> I just received a 1099-MISC for $2868.72 from a customer. I was under the impression that this was for income paid to a nonemployee. I sold them goods and I don't see how that relates. If that is the case then I would think every business would be sending out 1099's and I would be flooded with them.
> 
> Has anyone else ever received one of these for selling a product?


You are correct, 1099 are for independent contractors so if your customer was reselling your product for a profit as maybe a print broker.. maybe that's what he could have filed for??


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## thutch15 (Sep 8, 2008)

FatKat Printz said:


> You are correct, 1099 are for independent contractors so if your customer was reselling your product for a profit as maybe a print broker.. maybe that's what he could have filed for??


Ok thanks for the input from both of you.

They were the finally users of the product, so I just want to make sure they are doing everything right... they were a total pain in the *** customer and kept screwing me around to the point that I made $0 profit on the huge job.

So then would I just remove the $2K from gross income? If not I feel like it is going to get hit twice... once under gross income and once under the 1099.


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## Louie2010 (Feb 26, 2010)

Maybe they read about the 1099 provision in the health care bill and thought it went into effect this year.

If you are incorporated you shouldn't get one. Regardless I don't think you need to adjust your sales, but make sure to point it out to your accountant to be sure.


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## lben (Jun 3, 2008)

A 1099 is something that an employer sends to it's employees that are independent contractors. I hate when people who don't know what they're doing try to do their own taxes. So, now the question is why does he think you're an independent contractor working for him? Why does he think the work you did for him was as an independent contractor? Sounds like he's itching to get into it with the IRS...


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## Regress (Feb 2, 2011)

lben said:


> A 1099 is something that an employer sends to it's employees that are independent contractors. I hate when people who don't know what they're doing try to do their own taxes. So, now the question is why does he think you're an independent contractor working for him? Why does he think the work you did for him was as an independent contractor? Sounds like he's itching to get into it with the IRS...



Ironic post lben. Employees and Independent Contractors are different things. 

Thutch15, keep the 1099 for your records and don't worry about adjusting any of your gross sales. 
(And never work for 0% profit unless it's for charity.)


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## thutch15 (Sep 8, 2008)

Regress said:


> Ironic post lben. Employees and Independent Contractors are different things.
> 
> Thutch15, keep the 1099 for your records and don't worry about adjusting any of your gross sales.
> (And never work for 0% profit unless it's for charity.)


I don't make it a point to work for $0, but this was a bad situation getting worse and I got what I could.


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## thutch15 (Sep 8, 2008)

lben said:


> A 1099 is something that an employer sends to it's employees that are independent contractors. I hate when people who don't know what they're doing try to do their own taxes. So, now the question is why does he think you're an independent contractor working for him? Why does he think the work you did for him was as an independent contractor? Sounds like he's itching to get into it with the IRS...


Exactly what I was thinking.


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## thutch15 (Sep 8, 2008)

Louie2010 said:


> Maybe they read about the 1099 provision in the health care bill and thought it went into effect this year.
> 
> If you are incorporated you shouldn't get one. Regardless I don't think you need to adjust your sales, but make sure to point it out to your accountant to be sure.


I just applied the 1099 and sales have to be adjusted. If not it is doubling the sales from that job.

Also I am not incorporated.


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## TshirtGuru (Jul 9, 2008)

I could be wrong but I only get 1099 from schools and universities. I think they are forced to file 1099 if you did work for them even if you aren't an independent contractor I believe they see any vendors as an independent contractor. 

If it's a personal order, who knows. My CPA does my taxes, I just give him all the paperwork. Thank god. Cheap too, he does it for $100, state, federal, and self employment taxes. Do you have a CPA to ask?


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## nottypical (May 1, 2009)

thutch15 said:


> I don't make it a point to work for $0, but this was a bad situation getting worse and I got what I could.


Been there, done that...ironicly is was the with the same client that sent me my 1099 too!


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## Louie2010 (Feb 26, 2010)

thutch15 said:


> I just applied the 1099 and sales have to be adjusted. If not it is doubling the sales from that job.
> 
> Also I am not incorporated.


Some business look at anyone who isn't incorporated that they contract for work as independent contractors and file 1099 to be safe on their end. But I agree if you are selling them shirts and they were buying a product it is unusual. Unless your receipt was worded to look more like a service provided, did you charge a sales tax on the entire amount?

You should consider an LLC, it helps protect you personally.


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## Louie2010 (Feb 26, 2010)

TshirtGuru said:


> If it's a personal order, who knows. My CPA does my taxes, I just give him all the paperwork.


I agree, a good CPA is worth the money. I wouldn't think of not using one. (Same thing goes for a good attorney)


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## TshirtGuru (Jul 9, 2008)

Louie2010 said:


> I agree, a good CPA is worth the money. I wouldn't think of not using one. (Same thing goes for a good attorney)


Yes, find a good one with experience. Don't go to H&R block. Look for references. I got lucky because my CPA has been doing my fathers taxes for the past 20 years. He also doesn't charge if I ask him questions.


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## Dennis Graves (Apr 27, 2009)

Actually, I think this is a new requirement, but your customer jumped the gun.

Part of the new tax law says that EVERY company you spend more than $600 with you will be required to send a 1099 to NEXT YEAR. Every small business group is trying to get it overturned, but it is currently still law. Even if you take your customers to a restaurant and spend over $600 for the entire year you will have to send the restaurant a 1099. Same with all of your office supply companies and everybody else you send money to.

Search the net and you will find more information.

Hopefully it will get overturned before the end of the year. It will be a paperwork nightmare and will prevent businesses from doing business with a lot of different companies. If they buy all their office supplies from one company instead or 3 or 4 different ones they will only have to send out 1 1099 instead of 3 or 4.


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## Louie2010 (Feb 26, 2010)

Dennis Graves said:


> Actually, I think this is a new requirement, but your customer jumped the gun.
> 
> Part of the new tax law says that EVERY company you spend more than $600 with you will be required to send a 1099 to NEXT YEAR. Every small business group is trying to get it overturned, but it is currently still law. Even if you take your customers to a restaurant and spend over $600 for the entire year you will have to send the restaurant a 1099. Same with all of your office supply companies and everybody else you send money to.
> 
> ...


 
Yeah, that was a little hidden nugget in the health care bill. The senate I believe just voted to remove that provision.


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## thutch15 (Sep 8, 2008)

Dennis Graves said:


> Actually, I think this is a new requirement, but your customer jumped the gun.
> 
> Part of the new tax law says that EVERY company you spend more than $600 with you will be required to send a 1099 to NEXT YEAR. Every small business group is trying to get it overturned, but it is currently still law. Even if you take your customers to a restaurant and spend over $600 for the entire year you will have to send the restaurant a 1099. Same with all of your office supply companies and everybody else you send money to.
> 
> ...


I will have to research, but I am thinking this just got over turned yesterday 2-2-11.

The House passed the overturn of Obamacare and yesterday it failed in the Senate, but I do think some changes were made... one of which was the removal of this requirement.


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## thutch15 (Sep 8, 2008)

Just for future reference the Senate did repeal that out of Obamacare:

Senate repeals part of health care law - Jennifer Haberkorn - POLITICO.com


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## Dennis Graves (Apr 27, 2009)

I hope you guys are correct. I know everyone was trying to get it overturned.

Dennis G


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## jean518 (Sep 23, 2009)

WHEW!! So glad they came to their senses! Geez what a nightmare that would have been! Might have forced me into hiring someone to do my bookkeeping. It is getting more than I want to deal with as it is. Going to check to see what costs are when we have our taxes done. Only so many hours in my day!


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## Dante2004 (Aug 23, 2010)

Could you imagine the paperwork mess that this would create?

Wow...

Think of the large ticket items you/some people buy. $600 would be EASY to reach. I travel a lot. I have spent that much on ONE plane ticket. Few nights in a hotel, rental cars...and that would just be for my TRAVEL budget.

Office suppliers, shirts/supplies, internet service, and the list goes on.

You might as well just close up your business and collect the Obama check (welfare).


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## lben (Jun 3, 2008)

The whole idea behind it was to cripple the economy. Obama wants us to redistribute the wealth of the USA to other countries around the world that don't enjoy the same economy that we do. It's all a part of his socialistic one world order he would like to see happen. But the only way he can do that is by destroying our economy to the point where we're all dependent on the government for everything. People get desperate enough and they'll accept anything including a marxist government to replace our "failing" capitalistic one. Gotta watch those progressives/liberals/marxist/socialist/commies.

I'm just glad they got rid of that nightmare. Now on to the rest of obamacare...


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## thutch15 (Sep 8, 2008)

lben said:


> The whole idea behind it was to cripple the economy. Obama wants us to redistribute the wealth of the USA to other countries around the world that don't enjoy the same economy that we do. It's all a part of his socialistic one world order he would like to see happen. But the only way he can do that is by destroying our economy to the point where we're all dependent on the government for everything. People get desperate enough and they'll accept anything including a marxist government to replace our "failing" capitalistic one. Gotta watch those progressives/liberals/marxist/socialist/commies.
> 
> I'm just glad they got rid of that nightmare. Now on to the rest of obamacare...


It is called PERSONAL RESPONSIBILITY ... most don't have it...always someones fault.

My main issue is that it is at the Federal level... would not have as much problem with it if it was at the State level like mandatory car insurance (that is mandatory if you want to drive on the state roads). That way I could move to a smarter state like maybe Texas or Tennessee (think both of those have no state income tax, which is a whole other story... you don't tax things that you want people to do... no wonder so many lazy people don't work)


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## binki (Jul 16, 2006)

The 1099 is optional to send out right now. In 2012 it is mandatory for any aggregate payments to a single vendor for all products and services. This is part of the health care bill. The purpose of the W-9 is to determine withholding on payments for goods and services. Corporations are generally exempt from the withholding but everyone else should have 30% of the payments withheld. 

Let me restate. Part of the health care bill makes it MANDATORY FOR *ALL* AGGREGATE PAYMENTS TO A SINGLE VENDOR OVER $600. 

_"Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year."_

_"But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases. "_

Health care law's hidden tax change to launch 1099 avalanche - May. 5, 2010


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## thutch15 (Sep 8, 2008)

binki said:


> The 1099 is optional to send out right now. In 2012 it is mandatory for any aggregate payments to a single vendor for all products and services. This is part of the health care bill. The purpose of the W-9 is to determine withholding on payments for goods and services. Corporations are generally exempt from the withholding but everyone else should have 30% of the payments withheld.
> 
> Let me restate. Part of the health care bill makes it MANDATORY FOR *ALL* AGGREGATE PAYMENTS TO A SINGLE VENDOR OVER $600.
> 
> ...



That is how it was, but as of yesterday that portion was pulled from the bill.


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## leomatic (Aug 17, 2010)

Sorry for the late reply, but I'm willing to bet whoever prepared that 1099 made a mistake and issued it to you. 1099 Misc are for a lot of things, but the purchase of good (physical things) are not usually required to be reported on them. Whoever prepared that 1099, probably just printed out all the vendors that the company paid more than $600 to, and if you were listed as just your name, they assumed you were some contract labor type.

As far as reporting to the IRS. As long as you have more income on your Sch C than that 1099 misc, you are ok. That customer sent the 1099 to the IRS, so the IRS has in its database your SSN with that 2k of income associated with it. As long as you report income more than that, you are fine.


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## ChameleonPrints (Apr 7, 2007)

thutch15 said:


> That is how it was, but as of yesterday that portion was pulled from the bill.


Don't forget how a bill works. The Senate has approved to pull it, but it still has to go to the house and then Obama still has to sign it before it is officially repealed. While I think this will happen, it hasn't happened yet so keep an eye on it.


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## TshirtGuru (Jul 9, 2008)

So schools and universities that purchase printed shirts from us shouldn't be sending us a 1099? Universities make us fill out a W9 form every year. Do I tell them I don't need to?


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## jean518 (Sep 23, 2009)

If it does not get repealed, it really does not effect taxes for 2010. Some companies just got ahead of themselves. I have not received any or sent any.


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## binki (Jul 16, 2006)

thutch15 said:


> That is how it was, but as of yesterday that portion was pulled from the bill.


Only passed by the Senate, needs the House and then the Pres needs to sign it.


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