1099 MISC From Customer For Goods Not Services

[SFBOB]

My client has received [6] 1099 MISC forms from his customers this tax year 2010. His sales are Electronic componets that are used in the manufacture of a larger machine that contains many parts other than the ones he sells. I have done his tax return for over 8 yeras and never received a 1099 MISC for hard items; he does not provide a service. He buys products from a manufacturer and resells them at a profit. Thanks for your replys. Bob

[Gary2]

What's the question?

[taxxcpa]

1099s

As long as his gross income exceeds the total of the 1099s there is no reason to be concerned with them. Just report his gross business income and forget about the 1099s.

[SFBOB]

My question is issuing a 1099 MISC for goods and not services.

I have been in tax prep for over 20 years and never seen a 1099 MISC for goods. My experience has been clients receiving a 1099 MISC for services, when it should have been a W/2. Any one else seeing lots more 1099 MISC in tax year 2010?

[dsi]

If congress fails to address this issue this year, we will see a ton of 1099-Misc next year. Furthermore, I'm certain we'll see amounts in box 7 that should be in another box. Many problems ahead.

[S T]

Just now

Spent 15 minutes opening 1099 forms for a small biz client, that he forwarded to me - so a lot of 1099 MISC being issued that were not being issued in prior years.

I am only checking to make sure they are in # 7 (for this client) - not worried about $$ amount as the 1099 forms are well under the Sales Receipts we are reporting (for this client)

However, as DSI pointed out, guess we had better be reviewing all of them to make sure they are reported properly.

This already is a nightmare on the reporting - so hope there is some type of repeal.

Agree with Taxxcpa - whether or not you received the 1099 - as long as you are reporting the proper income, and it is more than the 1099 - you should be okay

Sandy

[BHoffman]

Yep. Lots of 1099-MISC forms this year.

I'm very glad I checked all my small biz 1099s because I found one that was issued to the owner's SSN instead of the company EIN! Dodged a CP-2000 bullet by reporting the income on a Sch C and offsetting with Sch C Other Expense as Nominee to EIN xx-xxxxxxxx. Whew!

Agree that we are going to be seeing many weird 1099 things.

I'd suggest registering and finding a way to efile those 1099 forms. Drake includes the software required to efile them and it is great. Fast and easy. I plan on making a plug fortune preparing 1099s. Might just limit my practice to that. I'll be rich and famous. Yay!! (not).

https://fire.irs.gov/firev1r/default.aspx

[Tonantzinb]

Vedor is a sole prop that sells goods and services

I only issue the 1099-MISC for the service, correct? She is a VAR so I report the installation of my new server, but not the cost of th server? VENDOR... oops!

[taxea]

With this new 1099 law I think that businesses may be confused as to when and whether to issue the 1099 so they are playing it by issuing it rather than not, Maybe the IRS will see the light and get Congress to think before they act (ha,ha woulding that be a joy!).
Anyhow whenever you get upset about how many youre receiving just think about how many the IRS is having to deal with.

However due to the fact that their computer is matching this type of income I am taking the high road and entering each and every one in an attempt to pacify Uncle Sam's latest pet before it regurgates a letter.

You know I am all for them updating and computerizing tasks that will negate humans having to do them but you would think that whomever is doing the programming could have thought it out more thoroughly. I am afraid that we are in for even more unnecessary letters to our clients because this program that does the comparisons is not specific enough on all the places to look on the tax return for the information it is seeking.

Anyhow I think we should find an appropriate name for the computer that we can all use when referring to it. Perhaps all you cut-ups out there may like to take on this mission. Just try to keep it relatively clean.

My vote is for PITA

[Bees Knees]

For some historical perspective, see TTB page 1-11, which says:

Repeal of expanded 1099 reporting. The controversial provision
that would have required expanded information reporting on
Form 1099 for small business taxpayers has been repealed.
Under the repealed law, information return reporting would
have been required for all payments aggregating $600 or
more in a calendar year to a single payee. In addition to
payments for services performed by independent contractors,
the law required the issuance of a Form 1099 for payments
to corporations and payments for property and other gross
proceeds. For example, a business taxpayer that purchased
office supplies from a local office supply store would have
had to issue the store a Form 1099‑MISC if the total spent at
the store was $600 or more during the year. This requirement
no longer applies. The rules that require information return
reporting for payments of $600 or more to non-employees
(independent contractors) still applies.

Obviously, not everyone heard about the law being repealed. That is why you are seeing more 1099s this year for things such as inventory, supplies, and other goods.