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I have my fiance using my paypal account to receive all of

the funds. She will be...
I have my fiance using my paypal account to receive all of the funds. She will be reporting the income on her tax form. Since the 1099 is in my name how do I report to the IRS that she will be reporting it on her tax form? Would I report the income on schedule C and then in Other Expenses note that I was acting as an agent for (Her Name and SSN) and that she will be reporting the income?
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Answered in 5 minutes by:
1/3/2013
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,272
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi, since the 1099 is in your name, you should be doing your own schedule c and then the profits (after you deduct reasonable business expenses) flows to your tax return on line 12.

Since there's an IRS matching program, where they will have gotten a copy of that schedule C, you're going to have to report it in one way or another.

If your fiance didn't get the 1099 from the reporting company, then she wont have to (shouldn't) report the income at all.


Hope this helps

Lane

Let me know if you have questions.


Positive feedback (or an “accept”) is highly appreciated. That’s the only way we’re paid. BUT, if you need CLARIFICATION, COME BACK here. Also, feel free to bookmark this page to come back for reference.

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Customer reply replied 5 years ago

No I did not receive any of the income , she gets it, I do not want it on my tax return. She needs to report it. So how can we do this?



You can expenses the money to her ( would be a deduction from YOUR schedule C).

Then you should give her a 1099-misc (that's the IRS rule, if its over $600 for the year).

http://www.irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income-

The reason you'll need to do it that way, is that if you received a 1099 the IRS is going to be looking to you to pay tax on that income.


But that would work.

Just be realistic about what it is that she's doing to generate the income.

Make sense?

Lane


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One last thing ...

 

 

 

If you use the agent idea, it will be less of an audit flag if you take a really small commission (maybe 1 or 2 %).

 

 

Most people don't just act as a pass through for nothing.

 

 

I'm guessing any other expense at all could wipe the income out for you.

 

 

 

 

Lane

 

 

 

 

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Customer reply replied 5 years ago

Well it's probably around $40,000. She is an EBAY power seller.


 


So I should expense it on the schedule C and state on it that I am acting as her agent and she earned the money through EBAY, take 1% as income on my taxes and create a 1099 for her and I would assume send it to the IRS and give her a copy right?



You have it Joe

That would be the completely legitimate way to do it.

AND, you probably already know this, but she can take some reasonable expenses on her own schedule C too.



Lane

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,272
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane and 87 other Tax Specialists are ready to help you
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Thanks for the feedback Joe.


http://www.internetbiztaxtips.com/2007/07/top-20-tax-deductions-for-ebay-sellers/


Lane



To ask for me again, just say … “For NPVAdvisor” … at the beginning of you question OR

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…pleasure working with you!

Lane


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Lane
Lane
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