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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4066
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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My father is a retired coal miner. I now run a contract labor

Resolved Question:

My father is a retired coal miner. I now run a contract labor business who provides trained coal miners to mines. Throughout the year, I am constantly calling my father getting advice, and asking questions about the coal mine business. He has 30 + years experience and I have 3. I felt like he deserved some reimbursement for his time and knowledge so I gave him $11,000. Now, is it ok to give him a 1099 for that money? He doesn't mind that I do, but just wanted to make sure that using him for "consulting" was a reason for a 1099.
Submitted: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year ago.

Stephen G :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything that is not clear.

Stephen G :

Yes, you should be giving him a 1099.

Stephen G :

You should do so as soon as possible as he was supposed to receive his copy by 1/31 &

Stephen G :

they are due at the IRS by 2/28.

Customer:

Yes, I did. But after I gave it to him someone told him that he could get in some kind of trouble with the IRS. I am going to file electronically which I believe extends my due date.

Stephen G :

Trouble for what. He'll need to report the $11,000. on his tax return and pay income & social security and medicare tax on it.

Customer:

He is elderly and I think he just thinks that giving advice "consulting" isn't reason for a 1099. He has already given everything to his tax professional and he did his taxes (hasn't submitted them yet), then come back to me and felt like he could get in trouble with IRS if he used the 1099. I reassured him that it was fine. I told him I would get professional advice, which is why I contacted you

Stephen G :

Well as you know he doesn't attach the 1099 to his tax return. Does he have a Union pension as well as Social Security?

Customer:

Yes I believe he has both.

Stephen G :

How old is he?

Customer:

73

Stephen G :

You realize that the $11,000. may make some of his social security taxable. Is he married?

Customer:

yes he is married

Stephen G :

Well, hopefully his tax preparer knows what he or she is doing; his return is probably somewhat different this year due to the $11,000.

Customer:

I just want to ease his mind that he is not doing anything dishonest or illegal for giving advice.

Customer:

He is the one paying the taxes on it...

Stephen G :

If he was doing something wrong then a few million accountants & several million lawyers would be ahead of him in the line waiting to be admitted to the slammer.

Customer:

LOL... Ok!!! Guess you are right. He is a straight shooter...just trying to help him sleep at night...Thank You

Stephen G :

If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Again, please remember to rate my response. Bonuses, where you think they are warranted, and excellent ratings, are always most appreciated. Thanks again for using JustAnswer.com.

You may get a short survey from the site; if it isn't too much trouble please answer it; thanks, SEG

Customer:

OK sure will

Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4066
Experience: Extensive Experience with Tax, Financial & Estate Issues
Stephen G. and 6 other Tax Specialists are ready to help you

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