Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-29-2009, 11:40 AM
Junior Member
 
Join Date: Jan 2009
Posts: 3
1099-MISC For Spouse?

Here's the situation:

I run a home-based business that requires me to hire my wife for some administrative contract work in order to help me with my business demand. She has her own business that offer such services which is also a home-based business. The amount does exceed the $600 limit.

As always, we will be filing a joint return.

My question is this:

Should I file a W-9, report the income and provide a 1099-misc to her?

Thanks.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-29-2009, 05:34 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
My question is why are you complicating your situation! Why don't you make this a joint business, say an LLC and the monies that are paid to either you or your spouse consider it as a distribution.

Alternatively, treat amounts that are paid to your spouse as a draw, as if you are taking the salary. There should be no impact on the tax return. There really is no need to go through all the trouble of doing a W-9 and issuing a 1099-Misc, at least that is based on the limited information that you have provided to me.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 01-29-2009, 11:50 PM
Junior Member
 
Join Date: Jan 2009
Posts: 3
Quote:
Originally Posted by TaxGuru View Post
My question is why are you complicating your situation! Why don't you make this a joint business, say an LLC and the monies that are paid to either you or your spouse consider it as a distribution.

Alternatively, treat amounts that are paid to your spouse as a draw, as if you are taking the salary. There should be no impact on the tax return. There really is no need to go through all the trouble of doing a W-9 and issuing a 1099-Misc, at least that is based on the limited information that you have provided to me.
There are various reasons why our businesses are seperate. One reason is due to SSDI that I receive (blind disabilty) which I can make certain amount per month (over 12 month period). Often times I would hire my wife to take care of some business that I cannot handle myself.

The business is not a LLC (or jointly with my wife) because of another reason which I like to keep personal. So the question I wanted an answer to is how the money is handled if I paid for services rendered? Should I have her fill out a W-9 and report the income and send her a 1099-misc even though we file jointly on our tax return?

Again, I am paying to her business in which she offers services to me. I really don't think it falls under expenses.

Thanks.


Last edited by mr-ed : 01-29-2009 at 11:52 PM.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #4 (permalink)  
Old 01-30-2009, 12:28 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
In that case, maybe your circumstances dictate that you could provide your spouse with a 1099-Misc, in the name of her Company though! You certainly also discuss this with your Tax adviser to determine what would be the best approach for your unique situation.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #5 (permalink)  
Old 01-30-2009, 10:42 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
The best solution is to issue a 1099-Misc in the name of her business, assuming of course she is conducting a business as either an LLC or as a DBA. This should suffice! Report the amount paid to your spouse on the 1099-Misc and then send a Red copy of the Form 1096 Annual Transmittal Form along with a Red copy of the 1099-Misc to the IRS.

Legally speaking you can still file a joint return as well even if your business issued a 1099-Misc to your spouse's business. It happens all the time!

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Corrected 1099 Misc strelbert02 Income 3 04-30-2008 09:59 AM
1099-Misc Income and IRA sirscott IRA/Sep 2 03-02-2008 02:35 AM
1099-misc Jaduexclens Income 1 02-22-2008 07:23 PM
1099-MISC income guidowitz Income 3 02-14-2008 12:07 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.