1099

[Horace Greeley]

At 06:59 PM 1/17/2006, you wrote:
>Please elaborate.  What kind of invoicing would make it one way versus
>another?

How much is labor and how much is material?  Under existing tax 
codes, someone, someplace, has to account for that.  The expectation, 
unless you have a reseller's permit or license, is that you pay tax 
"at source" on whatever parts and materials you use when you purchase 
them.  That portion is, ostensibly, already taxed.  The labor portion 
is assumed to be untaxed, and, therefore "should" be reported.

My experience is that I did not like being the one who had to make 
the determination between the two and/or be responsible for someone 
else's failure to report the income received from me.  On one 
occasion, in doing a favor for a manufacturer (often a mistake, but 
that's another story), I acted as a contractor contracting the 
services of several other technicians for a fairly large and 
extensive amount of work.  As things worked out, because I failed to 
submit 1099s, and because several of those folks chose not to report 
as income the money I paid them, my taxable income (and, therefore, 
my tax liability) was significantly higher than it would otherwise 
have been.  It took several years and an audit with penalties to get 
it all worked out.  Therefore, I choose to provide 1099s perhaps more 
often and covering more stuff than I technically need to do.  YMMV.

Best.

Horace




>David Love
>davidlovepianos@comcast.net
>
>-----Original Message-----
>From: pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] On Behalf
>Of Horace Greeley
>Sent: Tuesday, January 17, 2006 6:44 PM
>To: Pianotech List
>Subject: RE: 1099
>
>At 05:50 PM 1/17/2006, you wrote:
> >What about if you have a set of keys made?
>
>That depends on how things are invoiced.
>
>Also, different accountants interpret these code sections
>differently.  The more conservative one is with this, the less likely
>one is to have an audit.
>
>Horace
>
>
> >David Love
> >davidlovepianos@comcast.net
> >
> >-----Original Message-----
> >From: pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] On
>Behalf
> >Of Dean May
> >Sent: Tuesday, January 17, 2006 5:30 PM
> >To: 'Pianotech List'
> >Subject: RE: 1099
> >
> >I'm pretty sure it is for money spent on service (labor).
> >Goods/materials are exempt. If you are a reseller you don't issue 1099's
> >to your suppliers of goods.
> >
> >Dean
> >Dean May             cell 812.239.3359
> >PianoRebuilders.com   812.235.5272
> >Terre Haute IN  47802
> >
> >
> >-----Original Message-----
> >From: pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] On
> >Behalf Of David Love
> >Sent: Tuesday, January 17, 2006 8:10 PM
> >To: 'An open list for piano technicians'
> >Subject: 1099
> >
> >What's the rule on who gets 1099s and who doesn't, anybody know?  I know
> >that contract labor over $600. does, and I know that businesses that are
> >incorporated do not.  What about manufacturers?
> >
> >David Love
> >davidlovepianos@comcast.net
> >
> >
> >
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