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I am started a type of retail business onlin where people…

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I am started a...

I am started a type of retail business onlin where people can promote my virtual video that will be bought online and when it sells we split the profit. They won't be my employees, this will be their own extra business, a retail business. How do I hand the taxes with this kind of a business? Do you have a link that will explain what I will have to do for people who will be promoting my retail video. Can you give me links so I can explain to them how they can do their taxes at the end of the year?

Lawyer's Assistant: What state are you in? And have you consulted a local attorney?

Hawaii

Lawyer's Assistant: Has anything been officially filed? If so, what?

No this is my first contact to learn this

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

I haven't had any sales as of yet. I just need to know and have links on how I will do my taxes and how the people who promote my virtual online video do their taxes when we get sales and we split the profit.

Submitted: 5 months ago.Category: Legal
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Answered in 5 minutes by:
11/11/2017
Lawyer: Legal Eagle, Lawyer replied 5 months ago
Legal Eagle
Legal Eagle, Lawyer
Category: Legal
Satisfied Customers: 10,280
Experience: Licensed to practice before state and federal court
Verified

Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating (click here for more info) so all that means is that you can count on me to help today. Because I want to provide you with the most accurate answer possible, do you mind if I take a moment to review your question?

Please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

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Lawyer: Legal Eagle, Lawyer replied 5 months ago

Thanks very much for your patience. Generally, you won't have to deal with taxes for these people, so long as you do not consider them employees, but rather consider them independent contractors. Under IRS rules, if a person is employee, then you have to withhold their taxes for the state and federal government. On the other hand, independent contractors do not need to have their taxes withheld as they must simply report their income on their own. Accountants, doctors, physicians, and many laborers are considered independent contractors and have to report their earnings on their own taxes. If you click here, you can see the IRS's difference in understanding IC's vs. employees. Did you have any other questions for me?

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Customer reply replied 5 months ago
Okay you didn't really answer my question. Now here is the deal, two things. First how will I clam my taxes on retail sales, can you give me a link to learn this? I will be paying my independent contrators half the profits. Do I clam this money or 1099 them? If so how do I do that?
Second, I want to be able to give these independent contractors a link so they can learn how they will have to do their taxes. I do not want it to be a surprise.
Lawyer: Legal Eagle, Lawyer replied 5 months ago

I apologize if I didn't answer your questions. What kind of entity is this? Is it a sole proprietorship or is it a C-Corp? An LLC?

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Customer reply replied 5 months ago
sole pro, very small business, new to this tax thing in dealing with retail and working with others to sell retail. thank you
Lawyer: Legal Eagle, Lawyer replied 5 months ago

I understand. If it is a sole prop, then you're going to file the 1040 return. This is the return for sole prop small businesses Click here to see the actual return, the deductions, and the instructions for it generally. As far as you paying your independent contractors, yes, you would give them a 1099.

As far as your ICs, they will need to do the same thing and file a 1040 or claim it on their regular tax return as ordinary income, depending on what they want to do.

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Customer reply replied 5 months ago
Okay, thanks I'm getting a better understanding on this subject and could you please give me a link to learn how to 1099 others?So the people I 1099 will have to pay taxes as well on what I pay them? They will have to fill out this profit and loss form and that is it?
What if I just pay the taxes and give them half of the profit, is that possible?
Customer reply replied 5 months ago
Or can I just give them half the profit and we both file 1040. Do I really have to 1099?
Lawyer: Legal Eagle, Lawyer replied 5 months ago

Hi, one moment...

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Customer reply replied 5 months ago
Thank you
Lawyer: Legal Eagle, Lawyer replied 5 months ago

Thanks for your patience. Let me see if I can take your questions one by one:

1. If you click here, you can find out more information regarding 1099s and you can see the link to the 1099 forms.

2. The people for whom you provide a 1099 and file one with the IRS will file their taxes in their own way. It doesn't have to be on the 1040. It can be however they normally file taxes, but it is entirely up to them how they do it, not you.

3. If you just pay the taxes and give them half the profit, you could do that; however, they may be considered employees under those circumstances and that means you would likely end up with more trouble on your hands (e.g. unemployment insurance, worker's compensation, etc.) I would not recommend it.

Any other questions for me?

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Customer reply replied 5 months ago
I still don't understand how to do a 1099, I understand what it is now but not how to file one. Can you please give the link to learn how to do that?So I will 1099 and they will have the choice to do a 1040 or just report income how ever they want but they will be responsible to pay the taxes right?How much will we have to pay in Hawaii retail tax, can you please give me a link to that? What is the percentage that we will have to pay on this retail product?
Customer reply replied 5 months ago
Are you still there?
Customer reply replied 5 months ago
I haven't gotten my question answered
Customer reply replied 5 months ago
I originally asked to get links to know how to do a retail business and you gave me explantion links of what things are but now how to filed a 1099, which is what I'm trying to ask. You gave me a link for the 1040 thank you. II feel you are going really fast and not really understanding what I'm asking. I now have to go and haven't received full answers to my quesitons.
Lawyer: Legal Eagle, Lawyer replied 5 months ago

I'm sorry for the long delay. I was having computer issues and had to reboot this bad boy. One moment while I answer your questions....

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Customer reply replied 5 months ago
Thank you very much
Lawyer: Legal Eagle, Lawyer replied 5 months ago

You bet. Okay:

1. Check out this link for how to file a 1099 for your independent contractors

2. Yes, they will have to be responsible for filing their own taxes.

3. As far as HI retail tax, I couldn't answer that for you. I'd recommend asking a local accountant because it wouldn't be possible for me to provide you accurate advice.

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Customer reply replied 5 months ago
This just says services, it doesn't say retail. Why is that?
Lawyer: Legal Eagle, Lawyer replied 5 months ago

As far as what specific tax form you need to provide them, my recommendation would be to speak with a tax accountant. To my understanding, if you are paying them, whether it's for retail services, contracting services, writing services, etc., tne 1099 form is what'll be required for you to file. However, any business owner is sure to speak with an accountant at least once to determine how to file and when. I have done the same in my business and I recommend it for you as well. Thanks so much.

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Customer reply replied 5 months ago
This is still not the instructions and how to file. It explains when you have to file.
Lawyer: Legal Eagle, Lawyer replied 5 months ago
You typically can file it electronically or send it in to the IRS via US mail.
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Lawyer: Legal Eagle, Lawyer replied 5 months ago
Believe me, when you speak with an accountant, some of those more specific procedural questions can be more easily answered. Also, an accountant may actually be able to just file them for you so that way you don't have to worry about
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Customer reply replied 5 months ago
Okay but where do I get the forms? Where can I see the intructions on how to fill them out?
Lawyer: Legal Eagle, Lawyer replied 5 months ago
You can check on the IRS web page. They will have instructions on how to do it and an accountant should be able to help you out as well.
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Customer reply replied 5 months ago
Thanks for the advice and I would still like to see how tomfile please
Customer reply replied 5 months ago
That has been my question to you, where is the link to this?
Lawyer: Legal Eagle, Lawyer replied 5 months ago
Hello, my recommendation would be to do a quick Google search. Because you are not a client of mine I can't do the kind of research that you're hoping that I could do. I'm very sorry. My recommendation would be to speak with the tax accountant. It is what I had to do to figure out how I should file and also to get some additional tips. Also, see if your independent contractors can help you out. What I can do as well as I can opt out of this question and let another expert potentially take over who may be has that link prepared and ready to go. Thank you very much for using just answer.
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Customer reply replied 5 months ago
Okay well, I'm totally not satisfied. You gave me links to explain things but now links of the instructions on how to do a 1099, really? I feel that would be very simple for you to find because you know how to look for things and considering I paid my money to get my question answered, I am or now was a client of yours! I feel you were not listening to what I was asking and where answer a question I didn't ask. I am not going to pay for this!
Lawyer: Bill Attorney, Lawyer replied 5 months ago
Bill Attorney
Category: Legal
Satisfied Customers: 2,040
Experience: Attorney
Verified

I'm attorney Bill another attorney assisting you.

You file this form here:

https://www.irs.gov/pub/irs-pdf/f1099msc.pdf

Each independent contractor should receive one,the IRS and you are required to keep a copy.

You will need your own SSN EIN and all of your contractors SSN's or EIN to fill out the forms.

You can file online or in paper:

Alabama, Arizona, Arkansas, Connecticut, Delaware, Florida, Georgia, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, West Virginia:

Department of the Treasury Internal Revenue Service Center Austin, TX 73301

Alaska, California, Colorado, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming:

Department of the Treasury Internal Revenue Service Center Kansas City, MO 64999

Sometimes as an alternative to 1099 you may get away with filing 1040 line 21 miscellaneous incomes but the 1099 MISC is the correct filing in case of a business entity where you are paying your partners.

Just a reminder I'm an independent legal expert and rely on your positive feedback today to get a credit.

You do this by rating 5*****, 4**** or better.

SO I hope you rate FIVE STARS before exiting today.

Thank You

Attorney Bill

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