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1099 Form for Affiliates That I Paid Over $600?

by The Oilman
16 replies
My payroll guy and my accountant seem to think I need to fill out the stupid 1099 forms (or something like it?) for everyone that I paid out over $600 to.

IS this true?

I realize it might be for a service, but.. do I do it for affiliates too?

Or are they considered my employees?

Your help would be greatly appreciated.
#1099 #affiliates #form #paid
  • Profile picture of the author Teresa Coppes
    As someone who has been receiving a 1099 for over 5yrs now, anytime someone makes over $600 they would need a 1099. Generally the 1099 is for independant contractor and a w2 would be for employees. That is for the US but ofcourse, for the absolute final word I would get in touch with IRS.
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  • Profile picture of the author The Oilman
    So if they're outside of the US, I dont do it, right?
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    • Profile picture of the author Johnathan
      Originally Posted by The Oilman View Post

      So if they're outside of the US, I dont do it, right?
      Yes, it is my understanding that is correct. The US I believe likes to have 'confirmation' from that person that they are not a US citizen, and don't have US based operations (i.e., their company isn't located there). If that is the case, then I believe you don't need to worry about it.

      Another thing, I think the 1099 is actually *optional* -- but in recent years it (implicity) has become more of a 'mandatory' thing (i.e., like some severe 'nudging' that you should do it). You should check and see if it is 100% required, but I believe it is a "suggested" form you send out.
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  • Profile picture of the author webpromotions
    You only need to do this for people you paid over $600 to that are NOT legal corporations, however even then there are some exceptions, such as attorney fees. (you need to file one for them regardless of the amount and even if they are a corp).

    However, your 'payroll guy' or accountant should be the one answering this question. Not the kind of thing I'd want to make decisions on based on advice from a forum.
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  • Profile picture of the author Ken Strong
    Originally Posted by The Oilman View Post

    My payroll guy and my accountant seem to think I need to fill out the stupid 1099 forms (or something like it?) for everyone that I paid out over $600 to.

    IS this true?
    If you're going to take income tax advice from a public forum instead of your payroll guy and your accountant, you best replace them (at least the accountant).
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  • Profile picture of the author GuruGazette
    I'm not an expert and this isn't professional/legal/accounting advice, but as someone who has been receiving multiple 1099's for a good 10 years now...

    - I believe they're required by law for US contractors/freelancers
    - They're also required by law to be mailed out by the last day of Feb
    - They use to be required by law for anyone (independent contractor including affiliates and service providers) you paid $600 or more to in the given tax year.
    - I say "use to" because if I'm not mistaken that was changed to $400 with the 2008 tax reporting year.

    Your accountant is the best person to listen to on this. Optionally you might consult a tax or business attorney.
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  • Profile picture of the author Chris W. Sutton
    Okay, here is how this works...

    The 1099 has to be mailed to the recipient by Jan 31.

    The 1096 has to be mailed by Feb 15 starting after 2008.

    You send a 1099 if you pay AT LEAST $600. Commissions require a 1099

    1099s are sent for payments you made IN THE COURSE OF YOUR BUSINESS. I assume you are running a business.

    1099s do not have to be sent to most corps

    I won't answer the question about foreign citizens because I don't have ANY clients who have people they pay overseas.

    Hope that helps
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  • Profile picture of the author Floyd Fisher
    Originally Posted by The Oilman View Post

    My payroll guy and my accountant seem to think I need to fill out the stupid 1099 forms (or something like it?) for everyone that I paid out over $600 to.

    IS this true?

    I realize it might be for a service, but.. do I do it for affiliates too?

    Or are they considered my employees?

    Your help would be greatly appreciated.
    If you're payroll guy and your accountant are saying the same thing......why are you asking us for?

    I'd listen to them.....you should have had those out months ago.
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  • Profile picture of the author Michael Oksa
    Originally Posted by The Oilman View Post

    My payroll guy and my accountant seem to think I need to fill out the stupid 1099 forms (or something like it?) for everyone that I paid out over $600 to.

    IS this true?

    I realize it might be for a service, but.. do I do it for affiliates too?

    Or are they considered my employees?

    Your help would be greatly appreciated.
    They "seem to think" they know something about their area of expertise!?

    Umm...

    Why pay them anything if you're not going to take their advice (no matter how correct it is)?

    Just askin'



    ~Michael
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    "Ich bin en fuego!"
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    • Profile picture of the author RenFromPenn
      Okay, well, let me ask you this, because it is kind of in the same vain. Let's say that I was selling via e-junkie and I made $2,000. Out of that, $1,000 goes to one affiliate, so I pay them and issue a 1099. Now, when I get my 1099 from e-junkie it is going to say that I made $2,000 when I actually only made $1,000 because my affiliate and I had a 50/50 split.

      So, how do I go about only being taxed for the $1,000 that I got out of the deal rather than the full $2,000 because it seems to me that I am going to be paying taxes on the affiliate $1,000 in addition to my own.
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      • Profile picture of the author Chris Grable
        Originally Posted by RenFromPenn View Post

        Okay, well, let me ask you this, because it is kind of in the same vain. Let's say that I was selling via e-junkie and I made $2,000. Out of that, $1,000 goes to one affiliate, so I pay them and issue a 1099. Now, when I get my 1099 from e-junkie it is going to say that I made $2,000 when I actually only made $1,000 because my affiliate and I had a 50/50 split.

        So, how do I go about only being taxed for the $1,000 that I got out of the deal rather than the full $2,000 because it seems to me that I am going to be paying taxes on the affiliate $1,000 in addition to my own.
        By claiming a tax deduction for the $1000.00 you paid out in affiliate commissions.
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        • Profile picture of the author RenFromPenn
          Originally Posted by Chris Grable View Post

          By claiming a tax deduction for the $1000.00 you paid out in affiliate commissions.
          This isn't an issue yet, but it may be one for next year. That remains to be seen. Anyway, in my tax program I was checking things out and I didn't see anywhere to deduct 1099s that I issue to people. Any idea how I go about doing that? Also, do I get a deduction for the full amount or is this like when you deduct business expenses and they only credit you a portion of the amount?
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      • Profile picture of the author Janus
        Originally Posted by RenFromPenn View Post

        Okay, well, let me ask you this, because it is kind of in the same vain. Let's say that I was selling via e-junkie and I made $2,000. Out of that, $1,000 goes to one affiliate, so I pay them and issue a 1099. Now, when I get my 1099 from e-junkie it is going to say that I made $2,000 when I actually only made $1,000 because my affiliate and I had a 50/50 split.

        So, how do I go about only being taxed for the $1,000 that I got out of the deal rather than the full $2,000 because it seems to me that I am going to be paying taxes on the affiliate $1,000 in addition to my own.
        You pay tax on what you report as your income and expense. The IRS doesn't tax off of 1099's per se. You should however be able to show that either a 1099 has been included in income or the reason it or a portion of hasn't been.

        Good Luck
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      • Profile picture of the author Floyd Fisher
        Originally Posted by RenFromPenn View Post

        Okay, well, let me ask you this, because it is kind of in the same vain. Let's say that I was selling via e-junkie and I made $2,000. Out of that, $1,000 goes to one affiliate, so I pay them and issue a 1099. Now, when I get my 1099 from e-junkie it is going to say that I made $2,000 when I actually only made $1,000 because my affiliate and I had a 50/50 split.

        So, how do I go about only being taxed for the $1,000 that I got out of the deal rather than the full $2,000 because it seems to me that I am going to be paying taxes on the affiliate $1,000 in addition to my own.
        You fill out a schedule c, and list the $1000 as a comission payout (it's right there on the form, just fill it in).
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  • Profile picture of the author RenFromPenn
    So, I found the answer to my previous question and I thought that I would share for others who are in need of the information. In TurboTax you enter the information under Contract Labor in the business walk-through.

    Just to test things out, I entered that I had given someone $100. Doing this reduced my taxes by $22.
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  • Profile picture of the author katherinedimacale
    Originally Posted by The Oilman View Post

    My payroll guy and my accountant seem to think I need to fill out the stupid 1099 forms (or something like it?) for everyone that I paid out over $600 to.

    IS this true?

    I realize it might be for a service, but.. do I do it for affiliates too?

    Or are they considered my employees?

    Your help would be greatly appreciated.
    That sucks but we have to do it as long as it's over 600 bucks even for legal services. Anyway, if you need to do it just follow this link Fillable Online irs 2013 Form 1099-MISC Fax Email Print - PDFfiller. On-line PDF form Filler, Editor, Type on PDF ; Fill, Print, Email, Fax and Export
    I just did my 8821 too at Fillable Online irs Form 8821 (Rev. October 2011) Fax Email Print - PDFfiller. On-line PDF form Filler, Editor, Type on PDF ; Fill, Print, Email, Fax and Export
    I know the software is free if you invite a couple of friends to try it out as well using this link goo.gl/oQvpJF
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