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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience:  Taxes, Immigration, Labor Relations
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I forgot to ask one more thing. Will this count as his gross

Resolved Question:

I forgot to ask one more thing. Will this count as his gross income? Even if it counts as gross it will be a problem.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

LEV :

Hi and welcome to Just Answer!
The income reported on form 1099MISC is your business income - it is included into your gross business income reported on schedule C.
Then - you will deduct all qualified business expenses - also on schedule C - and determine your NET business income.
As we determine your personal gross income - you will add only your net business income from schedule C - that amount is reported on form 1040 line 12.
So - only your net business income is included into your personal gross income for tax purposes.

Customer:

Ok i dont think the whole question got ask

Customer:

I had a question yesterday and just forgot to ask something about it

Customer:

Can you find my other question i ask yesterday or will i need to copy paste it?

LEV :

Please be sure to ask for clarification if needed - I will be with you.

Customer:

Ok the new question is even him transfering this over to me will it still be counted as his gross income if he fills the schedule C out and like the the original answer suggests?

LEV :

When you are asking about gross income - there are two different amounts - business gross income reported on schedule C and your personal gross income - reported on form 1040.

Customer:

Ok let me try to clarify. When he gets the 1099 and says its mine but then adds the amount to his schedule C and decuts it will that still go into account for his yearly gross?

Customer:

So will it be counted to his gross income in any way?

Customer:

*deducts

LEV :

1. The amount reported on form 1099MISC is included into business gross income - schedule C line 1.
2. Then you deduct business expenses and calculate NET business income - all on schedule C.
3. Now - you include NET business income into your personal gross income - that is done on form 1040 line 12.
So - yes the amount reported on form 1099MISC will affect his gross income.

Customer:

Ok thats the problem im trying to avoid because he cant go over a certain amount. Any other way to do this so it wont effect hid gross at all?

Customer:

*his

LEV :

Several ways - either he deducts qualified business expenses - that will reduce the amount included into his gross income, or
because you are the one who earned that income - he will pay you - and deduct that amount as his business expense. Similarly - that amount will be taxable for you.

Customer:

Yeah but that would just reduce the net , right? Because wouldnt the gross still be the same?

Customer:

Im looking for a way it wont effect his gross. The gross is a problem

LEV :

I understand - but as long as income is reported to him - you may not simply ignore that income.
You may only reduce it by deducting business expenses.

LEV :

Another way - to register C-corporation - it will receive an income and pay its own income taxes - in this case nothing will be reported as yours or your brother's income.

Customer:

Ok on the paypal account i can change the SSN, Phone number, ADDRESS, etc. The only thing i cant change is his name. Lets say i change all that and they send the 1099 to me since it has my SSN but the name is XXXXX XXXXX it. Could i still pay the taxes on it like that and maybe just put "Wrong name on it" ?

LEV :

Before sending any 1099 form - the payer will ask to sign form W9 - www.irs.gov/pub/irs-pdf/fw9.pdf
In particular - by signing the form W9 - the person will certify that:
1. The number shown on this form is his/her correct taxpayer identification number, and
2. He/she is not subject to backup withholding because, and
3. He/she is US citizen or other US person.
So if you provide mismatched name and SSN - you will be in violation of IRS regulations - and PayPal may simply close your account.
The name and SSN should match.

Customer:

Ok when you say register C-corporation does that mean to change the paypal account to a business account?

Customer:

hello

LEV :

That might be another option. C-corporation is a separate legal and taxing entity.
You will need to open a different account for C-corporation.

Customer:

I have an account of my own i just cant link it to ebay but that shouldnt matter. How would the C- Corporation work?

LEV :

If you will use your personal - all income will be reported to you personally.
If you want income to be reported to a separate business entity - that should be a different business account under name of that business entity - not your account.

Customer:

Ok so how could i link the account in his name to the business account so the business account is accountable instead of him?

LEV :

You may not LINK his account.
If you want income to be reported to a separate business entity - that should be a different business account under name of that business entity.

Customer:

Ok i dont see how that would help then with this situation. Because if it cant be linked he still gets the 1099 for his account it seems. Now if im able to change his account to a business account then the 1099 would come in the businesses name right? If im able to change his name into the business accounts name on his paypal and use my personal info would that work? I dont know if i could get it verified using the business name but guess its worth a try

LEV :

That is correct - if income is credited to HIS account (either personal or business) - that will be reported on his name and his SSN.
Even if you change the type of account to "business" - the income still will be reported to your brother. You may not “reassign” his income to a different pe4rsobn or a different entity.

Customer:

Ok so theres pretty much no way of it not counting as his gross income? If it counts as his gross income thats gonna be real bad. Is there anyway possible we can do something so it wont count as his gross income?

LEV :

Please be aware that gross business income and gross personal income - are different.

Customer:

Wel he's on assistance so would the business gross effect his assistance?

LEV :

No - the gross business income will not affect him - only gross personal income will affect his eligibility.
Please consider an example:
1. His gross business income is $3000.
2. However he has some qualified business expenses - let's assume - $1800.
3. So his NET business income will be $3000 - $1800 = $1200.
4. That amount $1200 will be added to his gross personal income and will be his taxable income. That amount will be counted for public assistance eligibility determination.

Customer:

So if he says the amount thats on the 1099 is mine then puts the total on the schedule C like i was adviced to have him do yesterday then that will not count in his personnal income?

Customer:

puts it on the schedule c then deducts the whole amount it wont be counted as personnal income?

LEV :

That is correct. If your brother pays you for your services - that will be his deductible business expense - and will reduce his NET business income which is counted as his personal income.

Customer:

Ok one more question. So the gross personal income and gross business income are seperate and when he does the deduction on the business income and lets say the net amount is 0 then it will not affect personnal income at all?

Customer:

Just clarifying

LEV :

That is correct - the gross personal income and gross business income are different amounts.
The amount of gross personal income includes Net business income plus other income types (wages, pensions, interest in the bank, etc – whatever is related to your situation).
If his net business income is zero - nothing will be included into his personal income.

Customer:

Ok thank you

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience: Taxes, Immigration, Labor Relations
Lev and 2 other Tax Specialists are ready to help you

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