Tax Question

1. You get invoices for everything.
2. You then hand them to your CPA.
3. The end.

If the person, or company, doesn't send me an invoice in some form.. either paypal or otherwise.. they do not get paid.

you also should still have 1099 them or whatever, I use an accountant for all this.

this is what im wondering about...

how do you keep a record? do u use quickbooks or something then just export and hand over to the accountant?

You use a credit card, paypal etc. and that's your receipt !

You don't need a 1099 when you pay for services or consulting
in the US or Offshore or if you pay a company.

If the IRS does an audit your pay ledger will probably be all
you'll need.

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

I just make sure to get the paperwork, and then the CPA deals with the rest.

I now use RENTACODER.COM almost primary for most of my website outsourced work. They handle 1099's as covered in their T.O.S.. However, I also get my receipt, or invoice from them.

When I buy other sites, I have them send me an invoice on new sites purchased. Most of that is done through paypal. Until I receive an invoice, they do not get payment.

I make sure to get a receipt for everything including traffic, links, etc. Anything that is business related must have an invoice. If they are an individual. Then they need to make a custom invoice for me.

I put all my business into Quick Books, and export it at year's end. I hand that, and receipts over to the CPA.

I've run into a few companies who do not send me my invoices on the first month, and just bill my card. Unacceptable. I will send them one e-mail asking them to change how they bill. If they do not respond, I cancel my service with them and find another.

I do not want ANY grief from the IRS. I hate taxes like anyone else, but I am not going to gamble my business on the ass rape wager.

I have receipts for every little thing. Including meals and gas. I save them all. If I get audited, hopefully they pack a lunch. Business or personal I have everything. Not just a credit card bill.

Barefootsies....


thank you so much for your input. I would love to hear how you organize/categorize everything (quickbooks and physical stuff) too if you dont mind!

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.