Quote:
Originally Posted by d0odx
are you sure about that spunkmaster? As far as i have been told by tax guys, if the other person doesnt pay income tax on it, you cant deduct it as an expense... so it seems that at the very least a 1099 would be mandatory to show you at least tried
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If you pay an individual more then $600 per year in fees or commissions then yes but not if you pay a company or paid less then $600.00.
Payments via credit card to paypal to pay someone will be reported by Paypal
so you don't need to report it on a 1099.
There are some exceptions where any amount must be reported on a 1099 like attorney fees and that's why you hire an accountant to keep your shit straight.
Whenever we pay by check the check is the receipt and our accountant has had to go down to the IRS 4-5 times in the last 10 years to show them the check ledger. She may have brought the canceled checks but I'm not sure and she has never told us to keep any receipts except for invoices. We always put the invoice number on the check though so they can be matched up. This has saved us over $100,000 over the years because big companies will do audits and rebill you thousands and you have to show them proof you paid them or they will send it to collections and this will go on your D&B report.
UPS hit us for a $40,000 bill about 6 years ago and an ad agency on Wall Street hit us up for $60,000 in unpaid advertising two years after we canceled our account with them. We cleared both of them with the cleared checks and matching invoices.