Call for Artists, Making Money at Juried Art Fairs, Craft Shows and Festivals
I'm being told by a CPA that I'm supposed to send out 1099 forms to any show I pay over 600 dollars to be in- anyone EVER heard of this? Called a big show and got their tax # and they said no one has ever asked for it before to send a 1099. Is this a new thing, something no one knows yet, something everyone ignores, or is he classifying booth fees incorrectly?
I don't know. Probably profit- I've been scrutinizing the 1099-MISC instructions to figure it out- it's in Greek....
It's absolutely ludicrous. Surely there's a different definition for show fees besides RENT...I'd like to know if anyone else has had this come up, or what they classify show fees as on their taxes if they are willing to share....
No, he just won't sign off on the part that says I sent off all 1099's I am supposed to. I have learned thru the grapevine this is a 2 year old law- anyone we pay over 600 is supposed to get a 1099- I'm looking into details and exemptions now...
This is a website page that tells us that in 2011 President Obama signed into law the REPEAL of the $600 threshold for a 1099 form.
I'm not a CPA, but it certainly sounds like they have it wrong. The booth fee is an expense, not wages paid to someone. There is a spot on the Schedule C for rents, and that's a good spot among others to itemize those. The 1099 is typically used to pay independent contractors for services rendered. A booth fee is not a service, it's money paid for a temporary place of business, which still sounds like a rent.
In a rare bipartisan moment, President Obama signed into law the repeal of the new 1099 filing requirement, which was initially mandated as part of the Patient Protection and Affordable Care Act (PPACA).
One of the more controversial provisions of PPACA, Section 906 created a new obligation for corporations to file a 1099 on each business transaction of $600 or more and to provide the payee with a copy.  This statutory obligation was more fully developed in §6041 of the Internal Revenue Code.
Congressional leaders from both parties agreed that the added 1099 filing requirement would be an administrative hassle and should not be implemented. Even President Obama stated that the requirement would “place an unnecessary bookkeeping burden on small businesses.” As a result, both the Republicans and Democrats worked together in both houses of Congress and recently passed a bill to repeal the additional 1099 filing requirement, which the President signed a week later.
The 1099 requirement for transactions over $600 is dead. And has been since 2011.
This repeal only applies to the 1099 requirements that were enacted in the PPACA act, not the filing requirements that were already in place. just the changes Obama made by putting them in the act.
Thank you David- I read that page earlier- but where did you find the part about payments to non profit orgs? I really need that-plus Ii had the thought that since they are Zapp shows, wouldn't that be considered a management company and also be exempt? I think this guy is so wrong.
It may be time for a new one, that's for sure.
While we're on the topic of taxes and forms, here's one I just dug out today thanks to a conversation with an IRS employee. The 3 years out of 5 profitability standard is not a hard and fast thing. If you can meet the critieria for running a serious business (there's 9 criteria BTW), and things have gone down the dumper, there is an out on this. Form 5213, Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit forestalls the decision by the IRS to turn your business activity into a hobby, and gives you another year to return to profitability. The short of it is that you can take a loss 3 out 6 instead of 2 out of 5. Section 2a is where the vagueness creeps in, as per the usual tax form nonsense. It says describe the activity, but it's for explaining what the business is, why the losses, and what you're doing to improve it.