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We are a small tutoring business. We advertise tutors on our

We are a small tutoring...
We are a small tutoring business. We advertise tutors on our website, market their skills, and then take a commission on each session they perform. They are in charge of setting up sessions, collecting payment, and communicating with customers. Do we need to send them a 1099 or are they responsible for reporting all earnings.
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Answered in 1 minute by:
8/14/2013
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,855
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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NPVAdvisor :

HI,

NPVAdvisor :

If they are collecting the payment and just sending you the commissions, they they should just report the income on thir Schedule C

NPVAdvisor :

(and you will report your, depending on your business entity)

NPVAdvisor :

I', assuming that the tutors are essentially sole proprietorships ad ahven't set up an entity

Customer:

Yes, that is correct

NPVAdvisor :

That's reakky it, ten ... If you collected the entire amont someone could make a case that you should 1099 but as they are collecting their commission is just a business expenses for them

Customer:

Ok...great. Thank you very much!

NPVAdvisor :

Quick questons .. are you a corp (s_corp, C-Corp, etc)?

Customer:

LLC

NPVAdvisor :

THen you're find... they won't need to send YOU a 1099 either

NPVAdvisor :

(sorry for the typos) ... "find"

NPVAdvisor :

Fine

Customer:

Awesome! Thank you.

NPVAdvisor :

YW, have a great evening!

NPVAdvisor :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,855
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified
Lane and 87 other Tax Specialists are ready to help you
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Thanks for the rating Bill.

If you'd like to work with ME again just say "For Lane only," at the beginning of your next question.

Thanks again,
Lane
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Customer reply replied 4 years ago

Yes...if I have further questions I'll contact you!


Thanks much!

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,855
12,855 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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