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Thread: What's up with this?

  1. #1
    Pamela
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    Default What's up with this?

    So last night a gf of mine just started doing phone as an IC. I tell her about my accountant, she says under $600 you don't need to file, as i have often read this on every contract.

    However you bet your ass the company is doing their part with the money paid out, even if it was under $600

    Am i right? What about this whole under $600 no need to file?

    She is not talking to me at this time, and i need more info. My accontant always wanted stubs from a company even if i quit them before $600 rolled around. Why?

    Pay records that is (stubs)

  2. #2
    Banned Melonie's Avatar
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    Default Re: What's up with this?

    $600 per YEAR is the threshold on independent contractor earnings below which the 'payer' is exempt from IRS regulations requiring them to file a 1099 form in the name of that independent contractor. Thus, theoretically, a girl could keep bouncing from one phone sex outfit to another before her earnings with any one outfit exceeded $600 and no 1099 forms would appear in her mailbox next February.

    However, IRS regulations DO require that such a girl must file a tax return and report her TOTAL income from all sources if that TOTAL figure exceeds $600 in a single year, with or without 1099's. That's why your accountant wanted pay stubs for lesser amounts.

  3. #3
    Yekhefah
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    Default Re: What's up with this?

    My boyfriend doesn't have to pay taxes on a commercial if they pay him less than $600... recently he did a two-day shoot and it wound up coming out to $625 or so in overtime, so he asked for them to reduce his rate and re-work the math so they could cut him a check for $600 flat. I think if you only earn $600 or less on a particular job, you don't have to pay taxes on it, and your accountant just wanted it for records.

  4. #4
    Pamela
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    Default Re: What's up with this?

    Quote Originally Posted by Melonie View Post
    $600 per YEAR is the threshold on independent contractor earnings below which the 'payer' is exempt from IRS regulations requiring them to file a 1099 form in the name of that independent contractor. Thus, theoretically, a girl could keep bouncing from one phone sex outfit to another before her earnings with any one outfit exceeded $600 and no 1099 forms would appear in her mailbox next February.

    However, IRS regulations DO require that such a girl must file a tax return and report her TOTAL income from all sources if that TOTAL figure exceeds $600 in a single year, with or without 1099's. That's why your accountant wanted pay stubs for lesser amounts.
    Thanks.

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    Banned Melonie's Avatar
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    Default Re: What's up with this?

    I think if you only earn $600 or less on a particular job, you don't have to pay taxes on it, and your accountant just wanted it for records.
    nope, according to my own accountant the $600 exclusion is on TOTAL earnings / payouts. So reducing the overtime to keep the one commecial job from exceeding $600 prevented a 1099 from being generated, but it did not remove your BF's obligation to report the $599 or whatever in additional income.

    Realistically speaking though, not having a 1099 issued reduces the chances of the IRS ever picking up on the existance of that $599 in additional income if your BF happens to 'forget' to report it on his tax return by a factor of 100 LOL !

  6. #6
    Yekhefah
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    Default Re: What's up with this?

    Ah, gotcha! He does take all his paperwork to his accountant and he hardly ever does short jobs like that, so it's not like he's doing some huge cheat or anything. I guess it's just the production itself not wanting to 1099 everybody and saving him a few bucks as well. That makes sense, thanks!

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    God/dess FrustratedBunny's Avatar
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    Default Re: What's up with this?

    anyone know what happens to someone who pays an IC over $600 and doesn't send a 1099? I have one I used to use that refused to have me send her a 1099 and said she wouldn't work for me if I did.

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    Banned Melonie's Avatar
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    Default Re: What's up with this?

    ^^^ technically speaking, in the absence of a 1099 the payment to an independent contractor is a 'gift'. This means that the person engaging the independent contractor's services then cannot write off the payment as a business expense.

    This is of course no big deal for a club who isn't accounting for all of the club' s income, in which case the absence of 1099's for payments made to dancers avoids a bookkeeping discrepancy from occurring i.e. the club has to earn the money first before it can be paid out !

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    Featured Member scorpio's Avatar
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    Default Re: What's up with this?

    Quote Originally Posted by Melonie View Post
    nope, according to my own accountant the $600 exclusion is on TOTAL earnings / payouts. So reducing the overtime to keep the one commecial job from exceeding $600 prevented a 1099 from being generated, but it did not remove your BF's obligation to report the $599 or whatever in additional income.

    Realistically speaking though, not having a 1099 issued reduces the chances of the IRS ever picking up on the existance of that $599 in additional income if your BF happens to 'forget' to report it on his tax return by a factor of 100 LOL !
    But Mel, the IRS spooks lurking in their closets with their super frikkin laser beam nano computers will find out! And then....off to the gulag! LOL!

  10. #10
    Veteran Member StuartL's Avatar
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    Default Re: What's up with this?

    I can't imagine for a second that the IRS will let you not pay taxes on a job if you only earn, say $500. What if you do 200 jobs per year at $500. Do you not pay tax then? I don't buy it for a moment. Anyone who acts like that faces big doo-doo from the IRS.

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    Member Jon_CPA's Avatar
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    Default Re: What's up with this?

    Quote Originally Posted by FrustratedBunny View Post
    anyone know what happens to someone who pays an IC over $600 and doesn't send a 1099? I have one I used to use that refused to have me send her a 1099 and said she wouldn't work for me if I did.


    For intentional failure to file an information return the penalty is the greater of $100 or 10% of the aggregate amount that should have been disclosed.

    For unintentional or late filings of information returns the penalties are:

    Within 30 days of the returns due date a penalty of $15 per return to a maximum of $75,000 for companies with revenues of $5 million and a maximum of $25,000 for companies under the $5 million in revenue mark.

    Past 30 days but on or before August 1st a penalty of $30 per return to a maximum of $150,000 for companies with revenues of $5 million and a maximum of $50,000 for companies under the $5 million in revenue mark.

    For any reporting failure after August 1st a penalty of $50 per return to a maximum of $250,000 for companies with revenues of $5 million and a maximum of $100,000 for companies under the $5 million in revenue mark

  12. #12
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    Default Re: What's up with this?

    Quote Originally Posted by StuartL View Post
    I can't imagine for a second that the IRS will let you not pay taxes on a job if you only earn, say $500. What if you do 200 jobs per year at $500. Do you not pay tax then? I don't buy it for a moment. Anyone who acts like that faces big doo-doo from the IRS.
    Yeah, you have to pay tax on that income, period. Your total income for the whole year has to be reported and taxed, whether or not you received some or all of it in payments of >$600. Shit, if this $600 no tax myth were true, NO ONE would ever pay taxes in this country because we'd all be figuring out ways to make all our incomes look like many different "businesses" or IC jobs earning just under $600 each. So a person with $48k income could just put it on paper as 96 different IC jobs each paying $500, and not owe any tax. LOL!! NOT gonna happen.

    Yek, your bf still has to pay tax on those $600 or less gigs. You bet your ass. He is supposed to report all those payments on his tax return, along with his regular income, and pay tax on the TOTAL. IRS isn't in the business of giving away any freebies.

    Quote Originally Posted by pheno View Post
    When you lead a nontraditional life don't try to measure it with traditional milestones.

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    Banned Melonie's Avatar
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    Default Re: What's up with this?

    Again, just because some individual payments in amounts of less than $600 did not trigger a mandatory 1099 report of misc. income to be issued to the IRS does NOT mean that a person who received the payment doesn't have to add it to his total reported income. It is only if a person's sum total of such payments plus all other earnings does not exceed the federal income tax reporting threshold of $8,450 or their state income tax reporting threshold (many are $7,000, some are as low as $3,000) that they can get away without filing an income tax return.

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