Author Topic: Why don't some companies have to send a 1099 for earnings?  (Read 2078 times)

meteor

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Why don't some companies have to send a 1099 for earnings?
« on: January 16, 2015, 04:00:21 PM »
I get payments for an online course for thousands of dollars a year in dribs and drabs.  They won't send out 1099's.  I thought every company had to do that once they pay you over $600.  Isn't this the law?  When I ran a business I had to do this for all my sales reps.  Why don't they have to? Does this mean they are not reporting what they pay me to the IRS?

MDM

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Re: Why don't some companies have to send a 1099 for earnings?
« Reply #1 on: January 16, 2015, 04:08:33 PM »
Are you doing this as an individual or as an LLC?

See http://www.irs.gov/instructions/i1099msc/ar02.html
Quote
Exceptions.   Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not required include all of the following.

    Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C- or S-Corporation). But see Reportable payments to corporations, later.

If as an individual it seems you should get the 1099.  Or is it being treated as all the people taking the online course are paying you individually?

We can speculate but your best bet is probably to call the course provider and ask this question directly.

Cpa Cat

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Re: Why don't some companies have to send a 1099 for earnings?
« Reply #2 on: January 16, 2015, 04:26:16 PM »
Hard to say why they aren't doing it. It's possible there's some exception in place. There would be absolutely no incentive to them not taking a deduction for their expenses.

But it's just as likely that they have a poor understanding of their requirements and are just not doing it. The penalties can be quite harsh if the IRS catches that, but at the same time, it's also fairly common for companies to overlook 1099s.

Regardless of whether or not you receive a 1099, it is your responsibility to track and report this income on your tax return. A 1099 makes that easier for you, but not getting one does not exempt you from your income reporting requirements.

meteor

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Re: Why don't some companies have to send a 1099 for earnings?
« Reply #3 on: January 16, 2015, 04:29:30 PM »
I don't want to name the company, because it is big.  They basically give you a cut of the fee for how many students enroll/subscribe. I would be considered a sole proprietor.