I have a sole proprietor client. They have paid two babysitters. One was paid part out of his personal checking account and part out of the business checking account (babysitter#1). The other was paid solely out of his personal checking out and used the transaction paid to babysitter #2 as a distribution to the owner of the company instead of paying babysitter #2 directly from the business. Babysitter #2 is not set up as a vendor in the business at all. He uses QuickBooks 2013. His personal checking account is not listed in his accounting program. He is requesting I create two 1099's from the business for babysitter #2 & 1 which are paid from the personal checking and listed as distributions to owner in the business because it's for his wife while she worked. I explained that I cannot do this, however these expenses can go through his schedule C. He is still persistent because the accountant he used last year did this...(not sure if she should have)
Can I create a 1099 from the business for the amount he paid the babysitters out of his personal checking account even though these payments were paid only through the personal checking account?