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03-02-2011, 08:06 AM   #1
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Tax questions (United States) IRS 1099 Forms

So I know that starting this year, a 1099 form has to be filed if the total gross revenue from a particular photography service exceeds $600.

How does that work. I'm not that great at tax stuff and it is going to be just this year that my jobs are going to be $600+.

Do I have to file a 1099 or do I have to get a 1099 prepared for for my clients and we both have a copy etc. Also should I get an EIN? If so what's the process for that?

Any and all advice will be appreciated.

Also, don't tell me to dodge anything or work under the table. I want to keep everything above board.

03-02-2011, 08:32 AM   #2
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1st. I edited your thread title to make it clearer just what kind of tax question you are asking...

2nd. Good question. We need a tax lawyer to really answer this but I don't believe that "billable receipts" from clients require individual 1099s even if they exceed $600... unless that client is a business in it's own right, and then they would have to fill out and provide you with the 1099 which you would then use to file your taxes.
http://en.wikipedia.org/wiki/IRS_tax_forms#1099_series & http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
3rd. EIN is your call. If you want to keep your photography "business" totally separate from your personal finances or have any intention of trying to "depreciate" any of your gear or claim expenses, then it is a good idea. I have not done it up to this point myself but plan to this spring as well as forming an LLC to protect my family from any losses/adverse actions against my business.

Mike
Carpe Luminous Photography

Disclaimer... I am not a lawyer nor do I play one on TV. Any advice/opinions given below are just my opinions and not legally binding.

Last edited by MRRiley; 03-02-2011 at 08:38 AM.
03-02-2011, 08:44 AM   #3
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QuoteOriginally posted by lurchlarson Quote
Also should I get an EIN? If so what's the process for that?
That's a personal call. Once you get an EIN, you have to make quarterly estimated tax payments on your business income, or you will face penalties. I have a friend who is a CPA, and she just uses her SSN.

If you want to get one, here is more information: Employer ID Numbers (EINs)

You might think about calling your local SBA/SCORE office. They will have all kinds of information about running a small business.
03-02-2011, 09:32 AM   #4
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Do hobby business laws apply here? If you spend your revenue on equipment, you don't owe tax on it, but it sounds like you are making more than you spend...

03-02-2011, 10:07 PM   #5
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Thanks for your help. I suppose the long short of it is that I need to make friends with an accountant.
03-03-2011, 12:02 PM   #6
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I am eager to see some more responses as I am faced with many of the same questions now. I getting an EIN and setting up a legitimate LLC for my photography and according to my tax consultant, photography business's are scrutinized more by the IRS and have a higher chance of being audited because of a higher rate of fraud in the past. Basically if you run your business properly and keep records of everything you should be fine, but I guess I will see how it all works soon.
03-09-2011, 06:42 PM   #7
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You can have an EIN without being an LLC. I'd be very worried about handing out my SSN to just anyone so the EIN is key.

I too highly recommend getting a good accountant. Although I had done our personal taxes for a very long time, once we started our business I realized it was well worth paying a couple of hundred bucks to not just get the business/personal taxes done right, but to also receive professional advice.

Getting an EIN is easy and nearly instant.

Info Site - http://www.irs.gov/businesses/small/article/0,,id=98350,00.html
EIN Application - http://www.irs.gov/businesses/small/article/0,,id=102767,00.html


Last edited by George Lama; 03-09-2011 at 06:49 PM.
03-13-2011, 12:31 PM   #8
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So wait, if my client is a business and they are paying me over $600 there will be a 1099 involved, coming from them to me?
03-13-2011, 03:06 PM   #9
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1099's are issued by the payer. You as a contractor earning more than $600 are required by law to provide a valid FICA or EIN to any who is paying you and requests the same. That is provided on TIN (taxpayer Identification form).

You are not required to provide any 1099's for payments received. All income must be reported even if the net income is zero or a loss.

You were always and still are required to file quarterly taxes unless you have another source of income that generates with holding that covers your tax and FICA obligations at the end of the year. Underpayment == penalities added on to the amount due.

Now here is a loophole for you, as long as you pay into the system as much as you paid in total for the prior year the penalties are waived but you still owe the additional tax. This is called the good faith attempt.

Your incremental income may not be that much but the 15.3% FICA tax on the net profit can bite you in the butt.
03-13-2011, 03:14 PM   #10
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QuoteOriginally posted by mel Quote
So wait, if my client is a business and they are paying me over $600 there will be a 1099 involved, coming from them to me?
Yes, if they paid you $600.00 or more and you are not incorporated (s corp, or LLC) you should get a 1099.
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