I'm just double checking. If you have a client with w-2 income and income that a sales company paid to them on a 1099, that must go on sched C and SE taxed on right? You can't put that in other income can you?
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1099 income
right on. New car sales people also have W2 and 1099 income which is reported on Sch C. -
not always.
If it is considered a SPIFF it is line 21 income. There is a IRS bulliten about them., do not have the number right here.AJ, EAComment
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3204
Pub. 3204...Comment
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Also pub 525, p. 34- "Mfr incentive payments"
Line 21 if it is a sales spiff.Comment
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As Lion mentioned, see Pub 3204 for guidance.
Here's the link:
The pub deals with automobile sales persons, but I think the principle applies to various other sorts of sales situations in which the manufacturer pays the SPIFF to someone who is employed by a dealer. If the SPIFF is paid directly to the salesperson, there isn't much doubt that it isn't subject to SE tax. However, there seems to be some leeway even when the manufacturer pays the SPIFF to the dealer who then passes it along to the employee, if that's what it is and if they put it on a 1099. You probably need to ask some more questions as to exactly what it is."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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I've never seen that pub 3204 before, I may be ammending some returns. The incentives in question are incentives directly from the manufacturer to the person for parts purchased by the dealership. Am I right in thinking this should be other income?Comment
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yep
I used to have an appliance saleswoman at a large, local store. She'd get a dozen 1099s from manufacturers each year for various promotions. Some used Box 3 and some Box 7, but they were all SPIFF and not part of her compensation from her W-2 employer. The way I read it years ago, if the employer would be on the hook if the manufacturer didn't pay, if it was part of her contractual compensation package as an employee, then it had FICA/Medicare implications. But, hers were directly from the manufacturers at the manufacturers' discretions and went to line 21 with no SE.Comment
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WOW--after all the research--I've never found pub 3204--how could I have missed that?! I will be ammending returns and refunding customers for the forms they didn't need, thanks and I don't mean that sarcastically, I strive to provide excellent service to my clients. My motto is treat them like I want to be treated.
Thanks Again!!!
& I agree this board is GREAT!Comment
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