Huge news just hit the 1099 reporting community.
Is a Rebate Payment 1099 Reportable?
Our Transportation department gives certain customers a 5% discount up front on their bill, and then later (twice per year) will issue them a check for another 5% rebate if they are still an active customer and continue to use our hauling services.
Would the 5% rebate payment be 1099 reportable? I'm not sure if this should be considered a refund, which wouldn't be reportable, or if it should be considered income since they have to meet certain criteria in order to get it (i.e. be an active customer).
If it is reportable, would it go in box 3 (Other) since it's not really compensation for any services performed?
A key point to begin:
In general product customer rebates are not taxable income.
But this is a unique situation.
Holding a Promotion Where Award Scholarship Money to Students: How Does the Reporting Work?
We would like to hold a promotion where we award money to students to be used as a scholarship at a university/college. We would actually pay the university the money and they would give the student the scholarship. Who's liable for giving out the tax forms to the student?
This goes to the heart of the issues surrounding the identification of who is the "beneficial owner" of the income.
Is it the student?
Or the University?
Does a page from IRS Link & Learn courseware constitute valid documentation on how to report taxable income
Does a page from the IRS Courseware: Link & Learn constitute valid documentation on how to report taxable income on Form 1099-MISC?
Specifics: I have talked to numerous IRS agents, and questioned here as well, on how to report for a program called Cash for Keys on the form 1099MISC. In all cases I was told that Box 7 was the best fit. I have been questioned numerous times by tax accountants over this matter, but none have ever provided any form of documentation. Every time I've been questioned in the past, I google "IRS cash for keys" and got nothing. But today, I found a link to a page from the IRS Link & Learn program that specifically states that this taxable income should be reported in Box 3. Is this a valid source?
If this is considered a valid source, what action is required for previously misfiled reporting? Should I correct previous filings? How many years back should I go?
Remember that you (as the wihholding agent) make the determination as to whether income is subject to wihholding.
We will be attending a student expo in China next month. At the expo we plan on giving away cash prizes. Is it still okay to just collect the W8ben assuming they are all Chinese nationals and no other documentation is needed?
We will be attending a student expo in China next month. At the expo we plan on giving away cash prizes to 9 winners. The cash prize would be wired from our US bank account to their personal accounts in China. The winners will be chosen from students who sign up on our US website.
While they are not in the US, they prizes will be given from our US accounts. Is it still okay to just collect the W8ben assuming they are all Chinese nationals and no other documentation is needed? Is it legal for a US company to hold a sweepstakes like this in China or is there an obligation for our company to report that to the Chinese goverment? Thanks for all your help, it is very much appreciated!
Obviously this is a complicated issue. Nevertheless there are some steps you can take to cut through those problems and that revolve around answering a series of questions. From there, let's get to answering your questions...
We're doing a promotion at a local university and we're giving away $100 travel vouchers. We're assuming the winners will all be foreign exchange students. Its a small amount and not reportable but we still need to collect the proper documents, right?
My question is regarding giveaways to international students. We're doing a promotion at a local university and we're giving away $100 travel vouchers. We're assuming the winners will all be foreign exchange students. Its a small amount and not reportable but we still need to collect the proper documents, right?
Would a W8ben be sufficient and if they don't have a SSN, do we have to withhold?
There are a number of issues that need to be addressed here. So let's walk you through them and make sure that you are doing what is needed to collect and validate the appropriate documentation that can lead to the subsequent withholding and reporting...
Is it okay to hire international students for a day at promotional events we do if they do no have Social Security Numbers?
Is it okay to hire international students for a day at promotional events we do if they do no have Social Security Numbers?
There are a number of different ways possible reporting could go. As such we will cover several sets of circumstances and then go from there. Let's start with some assumptions about the locatin of the work and the nature of the payee...
Are golf tournament plaques a 1099 reportable prize?
One of our subsidiairies has hosted a golf tournament in which certain individuals were awarded plaques based on their performance in the tournament. The plaques cost around $80 each and clearly exceed the de minimus value. We have requested that our subsidiary collect W9 information from the winners of the plaques, but they are hesitant to do so. Can you please confirm that the plaques would represent a reportable prize? Also, does it matter that they are claiming that the registration fee for the tournament covered the cost of the plaques? I don't think this would matter since the awards were based on performance (not everyone who participated got one). They are also requesting IRS code section numbers that detail this reporting requirement? Can you assist in pointing me to the correct code sections? Thanks for your help with this!
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.