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Thread: My Customer Wants To Do A 1099

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    God/dess Bella21's Avatar
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    Default My Customer Wants To Do A 1099

    Ack, okay... so basically, I've had this customer for... 3-4 years. He's an accountant. He used to do the clubs taxes (that's how I met him... neither of us work for that club anymore). I worked for him less than 2 years ago (he owns his own business) doing bank consolidations, answering phones, organizing, etc. He hired me on as self-employed back then, paid me cash every week, and then filed a 1099 and wrote pretty much everything off in supplies and mileage and whatever else he could pull out of his butt. The year before that, he did my taxes and didn't give me many details (I was pretty... duh... back then), but I really don't think he did a 1099.

    I currently have been dancing privately for this guy since then (I pull in around 10k from him a year). He asked me tonight if he could do a 1099 (pretending I still work for him) and then write it off for me in my taxes. I currently work at a strip club that does not do 1099's and a peepshow that does W2 (and I get paid hourly). For last years taxes, he did a bunch of write-offs (I actually got a small amount of money BACK).

    I'd rather this guy NOT do this... but, he does my taxes for free and I want the normal tax deductions I get from him as opposed to going somewhere else... Really, the situation would be the same as last year with the forms being turned in and what they're being turned in for and the income... Should I not stress about this?

    I basically want advice here...
    If you think school is hard, try being stupid.

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    God/dess Nautilus's Avatar
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    Default Re: My Customer Wants To Do A 1099

    if there is any chance that it will land you in a 'federal pound me in the ass' prison, then don't let him do it.

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    God/dess Deogol's Avatar
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    Default Re: My Customer Wants To Do A 1099

    1) This has to be the funniest thing I have read on here. And there is a lot of funny shit to read on this web site.

    2) Ain't nothing for free baby!

    3) If you are due for deductions, then any accountant will do that for you.

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    God/dess Bella21's Avatar
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    Default Re: My Customer Wants To Do A 1099

    ^He made up the deductions... no other accountant would do that. I can't understand how this is funny?? Maybe I didn't explain the situation very well... He pays me to come to his office, talk with him, and dance for him... He wants to do a 1099 (but not call it dancing). I want to know people's opinons on this.
    If you think school is hard, try being stupid.

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    Default Re: My Customer Wants To Do A 1099

    no problem if you're already OK with the IRS in regard to your 'declared income' and previous estimated tax payments.

    !
    Last edited by Melonie; 12-30-2006 at 04:32 AM.

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    Default Re: My Customer Wants To Do A 1099

    10K from him in a year? wow. I don't think guys do spend that much money on their gfs/wives!

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    God/dess Bella21's Avatar
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    Default Re: My Customer Wants To Do A 1099

    ^I meant around 19k. Sorry, I was tired. Thanks Melonie... I just feel uncomfortable about it since... Yea.
    If you think school is hard, try being stupid.

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    Default Re: My Customer Wants To Do A 1099

    Okay, i guess I'll be the first to question whether the Emperor is wearing any clothes.

    1) Isn't this illegal? I mean "He made up the deductions... no other accountant would do that" and "He wants to do a 1099 but not call it dancing" are kinda my tip off.

    2) Isn't it rather risky to post a question about doing something illegal to a public message board?

    3) If he's playing creative accounting for you, there's a high likelihood that he's doing it for his other clients, too, and therefore, an increased likelihood over time that he is going to get caught doing it, at which time, it'll all come falling down like a house of cards, you included. (Similar to the principle of "If I do extras for one customer, who knows where my lips have been.")

    4) You feel uncomfortable about it. We have a winner right here. Your intuition and common sense are warning you, but you're letting the desire for short-term gain raise false hope that it's okay.

    I'm just sayin'.

    -Ev

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    Default Re: My Customer Wants To Do A 1099

    as long as you pay your taxes on the income it shouldn't matter whether he sends the 1099. However, if he is making up deductions on your return when he is doing your taxes I'd worry about that. Maybe you should find a new accountant. If you get audited you could end up owing a ton of money.

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    Banned Melonie's Avatar
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    Default Re: My Customer Wants To Do A 1099

    well if he's going to 1099 you for $19k worth of payments for 'services', be prepared to cut a check to the IRS for estimated taxes in an amount somewhere around $4,000, plus another check to the Cal FTB for estimated taxes in an amount somewhere around another $1,000, by the 15th of January i.e. 2 weeks from now just to cover the taxes due on that $19k. I assume that you're already prepared to make estimated tax payments over and above these amounts on income earned from other sources ?

    ~
    Last edited by Melonie; 12-31-2006 at 07:56 AM.

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    Featured Member Katherine's Avatar
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    Default Re: My Customer Wants To Do A 1099

    ^^ I think he makes those 'deductions' on her behalf so that she doesn't end up p[aying any taxes on that 19K he 'pays' her.

    So she's paying whatever taxes on whatever income she would be claiming anyway.

    Then- this guy gets to write off all the money he pays her for dances- calling her services something else on the 1099 (saying she's doing office stuff vs dancing). Then he writes up deductions for her to minus out any taxes she would have to pay from his 1099ing her...

    Is that right bella?

    Well, it's the type of thing that could work on paper. But if you feel uncomfortable with it- don't do it. He needs to simply suck it up. He's spending that money on getting dances from you. He should be buying your time with ofter tax money. He has no legal right to deduct that. You're getting that amount of income from him for doing those dances. You should be paying taxes on that as well.

    The situation he wants will lower his 'income by 19k, thereby lowering his taxes.

    Your income is going higher or lower (as you should be claiming it regardless), but you will not be paying taxes on it if he makes up all those business deductions on it (which you couldn't do otherwise as you would claim it on your return as dancing money vs money from an office job...).

    So which do you want? Doing the legal thing? Or doing something that will save you and him some thousands of dollars while risking a closer look at the two of you from the IRS?

    Just be careful whichever you choose. I hate to scare you, but this thread is talking about the possibilty of you and him 'cheating' on taxes. This is a public board. Just tread carefully with this situtaion. If you don't feel like it's all hunky dorey ( <yes I'm a geek, I just said that), don't do it.

    Sophia_Starina = stripper goddess


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    God/dess Bella21's Avatar
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    Default Re: My Customer Wants To Do A 1099

    Yes, I have enough socked away to pay it... (But I really don't want to, of course... but not as much as I don't want an audit!). I also don't really feel comfortable with him writing off a boatload of expenses... It seems like it would raise a red flag. I work at a peepshow that pays me commission and minimum wage in paycheck form. I work at a strip club that doesn't turn in 1099's. I don't know how much money he'd be "saving" by turning a 1099 in like that, but I'm tempted to ask him to make a couple of write-offs and then just give me a couple thousand to make up the extra taxes I have to pay... If he would go for that. Or, telling him he can only do a 1099 for me in that way if it's for the same amount as when I was doing office work for him. I'm sure that he wouldn't send in a 1099 saying I work for him if he wasn't sure that I would back that up as well.

    I know this is a public board... but I feel pretty safe that the IRS isn't going to read this and track me down...

    How much would money would he potentially gain by doing this? I've been getting increasingly angry at him about this for these past few days... I haven't talked to him about it, yet.
    Last edited by Bella21; 12-31-2006 at 06:50 PM.
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    Featured Member Katherine's Avatar
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    Default Re: My Customer Wants To Do A 1099

    [QUOTE=Bella21;926946
    How much would money would he potentially gain by doing this? I've been getting increasingly angry at him about this for these past few days... I haven't talked to him about it, yet.[/QUOTE]

    Well, the amount he would save would particularly depend what tax bracket he's in. It ranges in percentage pretty significantly as you move to the higher brackets.

    Melonie will be able to tell you more...


    But don't forget- you'd be saving a potential couple grand as well. This is money you would (rather, should) be paying taxes on as well. If you're getting 1099'd on this $$ as office work money, and he make those 'deductions' on it so you don't pay on it, then that's thousands in taxes YOU are saving. You couldn't make those same deductions if it were money made from dancing...

    As said- if you feel uncomfortable, you shouldn't be doing this.

    Sophia_Starina = stripper goddess


    "Guys are so damn lame, the only way they can halfway make up for it is by opening their wallets."

    AznExtasy

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    Default Re: My Customer Wants To Do A 1099

    If he does a 1099 TO you, it's a writeoff for him. You then need to pay taxes on the income. There's nothing bad there

    The "bad" comes in when he "makes up" (you really should not have written that) expenses for YOU - there's where the illigitimacy may come in.

    I once had a guy do $30k of work on a building I own. He asked for it all in cash, but gave me a receipt. This meant I could write it off on my taxes - I have a receipt for the work - but left him with the cash he wanted. That part is legit...if he chose not to claim the income, or invent expenses against it, that's his risk and his decision. Same boat you're in.

    Doesn't matter what he calls the work you do for him. Call it housecleaning, call it plumbing, call it escorting (if such is legal in your state) it doesn't matter. The risk comes in how you handle the deductions.

    I'd probably pile all the expenses I could on the money (legit or nearly so) and pay my lumps on the rest of it. But then, I have the attitude that every society needs tax, it's the only way we get the government services we've come to expect. Yes, the gov't spends alot on stupid shit...but the price for getting the safety/security/society we want is taxes. Try considering yourself lucky to have an additional 20k to pay taxes on!

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    Featured Member Katherine's Avatar
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    Default Re: My Customer Wants To Do A 1099

    It's not an 'additional 20K to pay taxes' it's money she SHOULD be claiming anyway... The difference is that she's claiming she made it doing something other than dancing. Once again, what she was doing for the money isn't necessarily the question. Though- her accountant could make different deductions on this lump of money vs the one he is already making on her dance money. Therefore- sh'es claiming more income, which is good, while at the same time deducting more off- also good (for her)...

    I've been sitting wondering which way I would do if I were in the same situation. I'm not sure- some I'm not too comfortable with wouldn't sit well for me. But saving both your client a few grand, and getting to claim more income on taxes while not paying more on what you claim... Money's an amazing thing. Yeah. I don't know.

    Sophia_Starina = stripper goddess


    "Guys are so damn lame, the only way they can halfway make up for it is by opening their wallets."

    AznExtasy

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    Default Re: My Customer Wants To Do A 1099

    Oh c'mon now Bella. You don't want to pay taxes on the money, and now you'll have to since the transaction is officially on record. Both of you are doing something shady. I don't care, my accountant is very creative (all legally) and she kicks ass. Why are you mad about this other than not wanting that income to be reported at all? If you really had a problem with him deducting the money he's paid you, then you would report him. But he's helped you more than hurt you. Its win-win, in a weird quasi-legal way.

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    Default Re: My Customer Wants To Do A 1099

    Legally any person engaged in a trade or business that pays another individual $600 or more for services used in that trade or business is required to file a 1099.

    If you are not 100% sure of the integrity of the individual preparing your tax return then it is time for you to find a new tax preparer.

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    Default Re: My Customer Wants To Do A 1099

    Quote Originally Posted by Jon_CPA View Post
    Legally any person engaged in a trade or business that pays another individual $600 or more for services used in that trade or business is required to file a 1099.

    If you are not 100% sure of the integrity of the individual preparing your tax return then it is time for you to find a new tax preparer.
    Is that more than $600 at one time? What if I have a contractor do $600 worth of work, and then 6 months later in the same tax year do $200?

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    Default Re: My Customer Wants To Do A 1099

    Quote Originally Posted by lunchbox View Post
    Is that more than $600 at one time? What if I have a contractor do $600 worth of work, and then 6 months later in the same tax year do $200?
    Then that would be $800 bucks and you need to do a 1099. Ain't business wonderful?

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    Default Re: My Customer Wants To Do A 1099

    ^^^ yes ... by the letter of the IRS code, if dancers are forced to pay mandatory tipouts to DJ's, bouncers, house moms etc. - and the annual total exceeds $600 per person - then the dancer is supposed to issue a 1099 to the DJ / bouncer / house mom in order to deduct the mandatory tipout payments as a business expense !

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    Default Re: My Customer Wants To Do A 1099

    Thank you.

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