Several elderly friends have asked me to help them with administratrive work in there home. I would probably do this on an ongoing basis and I am sure each would end up paying me more that $600 a year. I would report all of this money (Schedule C I think) but am concerned for the people I would be doing the work for. Do they have to issue a 1099 for the work I would do for them? Could I just report the money quarterly without ever getting a form from them and have it be legal, I don’t want to get them into trouble?
Taxgirl says:
If I understand it, you’re going to be kind of like a Girl Friday? Opening mail, paying bills, that sort of thing, at times that are convenient for you – and for a number of different people?
Assuming that you can’t be classed as a household employee (which I think you’re not if my understanding of your situation is correct), then there is no obligation for your customers to report payments made to you.
Forms 1099-MISC are generally issued when payments are made in the course of trade or business. Personal payments are not reportable. If your customers are making payments to you for services in much the same way that they would pay their hairdresser or a kid that occasionally mows the law, there’s no reason to submit a 1099 to you.
Again, this assumes that you’re self-employed and that you control how the work is done. A self-employed worker also usually provides his or her own tools and offers services to the general public in an independent business – which sounds like what you’re doing.
If, however, you could be classified as a household or other employee (which would result in a form W-2 issued to you), or if you’re performing services for your customer’s trade or business (which would result in a form 1099-MISC issued to you), that’s a different story. You can read more about household employees here.
I hope that helps. And good luck with your business!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
It was a question posed to US taxpayers by the IRS in the wake of the UBS scandal: do you feel lucky?
The US offered US taxpayers the opportunity to voluntarily disclose offshore bank accounts as part of an amnesty program earlier this year. The choice? Come forward now and escape criminal prosecution or take your chances later.
It turns out that a number of US taxpayers didn’t feel quite so lucky. IRS Commish Doug Shulman has announced that more than 14,700 taxpayers came forward under the voluntary disclosure program. The disclosures were in the billions and covered accounts in 70 countries.
The number is higher than originally projected due to the numbers of taxpayers who made disclosures in the run up to the deadline. The deadline for disclosures had initially been September 23 but was extended to October 15 after input from tax professionals who were still fielding questions about the program from taxpayers.
UBS and the feds separately reached a settlement where UBS, in addition to a significant fine, agreed to release the names of over 4,500 US account holders at the bank. So far, only a handful of names has actually been released: at least two of those account holders have been sentenced to prison for their activities.
The remaining names will be disclosed over the next 10 months. Under the agreement, UBS will release the names of those account holders where there is a reasonable suspicion of “tax fraud or the like.” Generally, that includes high dollar accounts and accounts where there is a lot of movement of assets or complicated schemes. There will be procedure for appeals available in Switzerland.
ABC News is reporting that lawyers are already whining that their clients were misled by UBS about the extent of the banking secrecy. I suspect that means that lawsuits will be filed. That is, of course, how we like to solve problems in the US. It is *always* someone else’s fault, right? If the lawyers are smart, any such suits would do well to land in Switzerland and not in the US. Beyond the whole “juries likely don’t have sympathy for rich people who hide their money” issue, lawsuits based on the misdeeds of plaintiffs are not usually successful. Of course, that hasn’t stopped people from trying before…
For now, it’s a waiting game for UBS clients. The question is: do you feel lucky… now?
I just received a notice last week from my health insurance provider that rates at my office would be increasing an average of more than 25%. It’s not unexpected. Apparently, health insurance is one of the few industries which can regularly raise their prices by double digits each year without retribution.
But what is unexpected is that the increase is creeping us slowly towards what the Senate Finance Bill is calling a Cadillac plan. My bare bones little plan (no dental, no vision) now costs about $5,000 per year for individuals and $15,000 for families. And I happen to have one of the latter.
The Senate Finance Committee had proposed a 40% tax on the portion of insurance which exceeds $8,000 per year for individuals and $21,000 per year for families. If we get similar increases in our health care plans for the next two years, I’ll be extremely close to being at risk. God forbid we add dental (and I have three kids with crooked-y teethed parents so there’s no dispute that this will likely be a necessity at this point). Who knew that I had a Cadillac plan?
Notwithstanding public options and other controversial parts of the health care reform bill, the real issue that remains of concern to many is how the plan is going to be paid for… In addition to the 40% tax on those Cadillac plans proposed by the Senate, the bill as recently passed by the House would impose a 5.4% income tax on individuals making more than $500,000 and joint filers making more than $1 million. If existing tax cuts expire in 2011, which appears increasingly likely, the top income tax rate would grow to 45% – a 10% increase.
But here’s a thought. In an increasingly dim economy, isn’t it a little scary to rely on higher taxes from top wage earners to foot the bill?
I get a number of bankruptcy-related questions submitted via ask the taxgirl. That’s why I was intrigued when I was asked to write a piece on Wallet Pop about how Chapter 13 payments affect your taxes. You can check out what I had to say here: Wage earner’s bankruptcy doesn’t kill all tax deductions.
If you have additional bankruptcy-related tax questions, you can ask the taxgirl.
If you’re opposed to extending the first time homebuyer’s credit (I am), you’re probably in the minority. And you’re definitely not in the Senate. The Senate voted unanimously to approve the bill and the House is expected to follow suit (at least the approval bit).
Under the new law, the first time homebuyer’s credit [...]
You know what they say in Congress, if it’s not broke (enough), keep trying until it is…
So, with that in mind, Senate Majority Leader Harry Reid (D-NV) has announced an extension of the first time homebuyer’s credit.
Despite evidence that the credit has been used inappropriately – and perhaps criminally – lawmakers have agreed to extend [...]
So, who among us didn’t see this coming? IRS Commish Doug Shulman has announced the establishment of a new enforcement unit targeting the very wealthy. The group, called the Global High Wealth Industry, will specifically investigate partnerships, offshore trusts and other techniques used by the wealthy to hide income.
How wealthy is wealthy? [...]
Taxpayer asks:
Last year, I moved in with my boyfriend at his condo. He lost his job so I paid most of the bills. I paid the mortgage direclty for most of the year. I also paid some of his credit card bills, the car payment and some of his child support paymnets [...]
Taxpayer asks:
I don’t even know how to start.
Last year, I found out that I was adopted. My parents have no interest in helping me find my birth mother but it something that I have to do.
I have found a lawyer that says he will help me find her but it is very expensive. [...]
Taxpayer asks:
Thanks for taking my question.
I moved back home last year after I lost my job. I’ve been paying my parents some rent but I can’t afford to pay the original amount that we agreed on. Can they take the difference between what I promised to pay and what I actually paid as [...]
