Do we 1099 report payment in year project started or finished?
I have a two part question.
Issue: I have several capital projects that began last year and now we are making the final payment in 2013 after the installation piece.
Question 1: When reporting this spend is it done at time of contract or when US sourced portion is complete?
Question 2: I have one project that started last year but they combined the equipment and installation piece into one price. The project was completed earlier this spring. Should this be 2012 reportable income or 2013 reportable income?
Both questions address the timing of reporting and each have different variables.
However, the answer to each question is substantively the same.
Questions about issues with 1099 reporting for independent agents selling our insurance policies
I am with an insurance company that uses independent agents for selling policies. We send a 1099-Misc form to these agents for nonemployee compensation when required. We have 2 questions.
1- We currently issue a 1099-Misc when commissions are earned. The commissions may not necessarily be paid out to the agent yet but have been earned by the agent. Is this best practice?
2- We currently have an issue with a particular agent. He earned $45,000 commission in 2008 which was reported on form 1099-Misc. However, in 2010, that commission was charged back due to termination of the policy (covered in the contract) meaning the agent owed the company $45,000 in 2010. The agent paid that money back over a 2 year period. He has requested that we send a 1099-Misc with a negative amount to reduce his earnings for that chargeback in 2010 and 2011 and to show the payments he made back to the company. We do not believe a "negative" 1099 can be issued and that it would be up to the agent to reflect the money he paid back on his personal tax return. Do you have any information on anything similar?
These are complicated issues, but one's well within our expertise. Let's answer your questions using the numbered convention you provided, but first we want to address something your question has revealed about your organization's practices in regards to such matters and which we believe you must address.
How do I pay and 1099 report when the payee completes the W-9 with their name, business name, and social security number?
When a W-9 comes in and it has a persons name on line 1 with their social security number on it but the W-9 has a business name on line 2 and the invoice we recieve is for the buisness name, who should we make the check out to? The business name or the individual? We are purchasing items from them so the company is not providing us a service.
Validating Forms W-9 when they involve sole proprietor's or single member LLC's easily ranks as one of the more complicated compliance tasks you face. However, you must get it right. Here is what you need to know to do exactly that (and the answers to your questions).
How do I report medical plans reimbursing employees/members for gym memberships
What are the reporting implications for a Self-Funded medical plan that will reimburse portions of gym memberships (at the employers direction) to members/employees and their spouses/dependents? In order to qualify for reimbursement the members and their spouses/dependents must meet certain criteria, such as a minimum usage of the gym, gyms that offer certain types of services, etc.
So, the questions are:
- Are these reimbursements reportable?
- If so, are they reportable: on a W2 by the employer, as it is a self-funded plan and it is their employees being reimbursed; or on a 1099 MISC by the Insurance Company that is administering the health plan on their behalf
- Or, could this be considered a reduction in premiums (non-reportable)?
Great questions. Let's get you your answers. We will answer your three questions as asked but first there is a few things we just want to remind you about employer provided benefits and the reportability of such benefits.
1099 Reportability of Prizes/Awards Given Out By Non-Profit Foundation?
We are a non-profit foundation to support a state university. We often pay vendors for items (gifts/awards) that are given to students or alumni. We normally collect W9 information from recipients who receive items in exess of $75, but don't report it because we have yet to have anyone receive items totalling $600 or more in a calendar year. Just last week, we have had three items in excess of $600 each that have been given as gifts/awards and we are not sure how to handle them.
One is a crystal that has been purchased from and engraved by a local jeweler and was presented to a student who won a poetry contest. The total cost of the crystal was $1,000.
The other two items were medals which were presented to alumni. The base cost of the medals was $405 each, but there was also a die charge for the personalization and shipping charges. The total invoice was $1,499.50 (or $749.75 each).
We have been told by the AP department at the university that these types of awards (plaques, medals, trophies, etc.) should not result in a 1099 being issued because they are personalized and do not have a fair market value. Is that correct, or should we issue 1099-MISC's for the cost of these awards?
Also, we have gotten conflicting information regarding sending 1099-MISC forms to donors who are given appreciation gifts. If we give a donor an appreciation gift in excess of $600 (i.e. - football tickets), would that be something we would report on a 1099? We have always assumed that this is reportable, but have recently been told by another consulting firm that we should never send a 1099 to a donor.
In answering your questions we will discuss gifts, prizes, and awards together, but we will start with a detailed look at gifts - given the conflicting information you have received in the past regarding how to handle gifts to your donors.
Do We Need to Get Completed W-9's From Our Payees?
We're rolling out a suppliers' self-service portal. Among other things, our suppliers will be logging our secure Oracle solution to update their federal tax identification number, business address, bank account information, etc. We would like to eliminate the collection and retention of form IRS W-9, since the suppliers themselves will be certifying on the validity and accuracy of the information they provide to us.
Is it an IRS requirement for most payees to collect and retain IRS W-9 forms, keep them in paper or electronic format for future evidence?
Or, can we stop requesting IRS W-9 forms from those suppliers who enroll and become certified suppliers within our Oracle supplier portal?
There is no IRS requirement that payee have to collect and retain Forms W-9.
However, there are a number of steps the IRS requires you to take from a due diligence/compliance perspective. So let's discuss what you need to know and do.
Property Reports and Title Search Payments to Title Company: Are They Reportable?
If a title company is not incorporated, do we report payments made directly to the title company for things such as:
Property reports
Title searches
We will start with the basics.
You will want to walk through your standard progressions here.
Remember...
whenever you are unsure about a situation you always want to start with two simple questions:
Who is my payee?
What is the payment for?
In this case it's really all about the payment.
How Long Do We Need to Retain Past Forms 1099 Filed?
How long are we required to keep 1099's? We are an insurance company that process roughly 3,000 Form 1099's per year. Currently we have them as far back as 1997.
Former Employee Acting As Witness in Trial Our Company Involved In: Do We 1099 Him for Payments Rendered?
We have a retired employee that is acting as a witness in a jury trial our company is involved in, the invoice notes the number of hours and his last paid hourly rate. Do we issue a 1099-Misc to him , and if so is it in Box 7?
The question is: is your former employee truly former? Are these the only services he is providing? Does he still have a phone number and desk at the office? Does he still participate in staff meetings and staff training?
Purchases from LLC, Multiple Divisions, Do We Need to 1099 Report Each Year?
My company is owned by a large corporation that has a lot of different divisions. We currently purchase stuff from one of the divisions that is an LLC. I have them set up as a vendor and send them a 1099 every year. Both divisions are seperate entities in the company and we both have different tax ID #'s. Do we have to send them a 1099 every year?
First off the word "stuff" is used in your second sentence. Our assumption is that you mean "services" for this? As the reporting for purchases of goods is not required.