Gratifixation M wrote:
First let me say... the "search" function on MM truly sucks!!!

What I would like to know is... the men that I work with are average joes who responded to my advertisement. They are not pro models and do not normally file a schedule C.  Also, I do not pay more than the $600 required for tax reporting on a 1099.  (My average pay is $350)

Now, I know that everyone needs to report all income if they want to be morally content with their conscience, but how strictly is this enforced, if at all?  I know the IRS is not interested in income of less than $600, but multiply $350 by 25 models per year and I am shelling out almost $9,000 to various people tax-free because they are being paid as independent contractors (as they should be) and not employees. 

Would the IRS honestly waste the time of 25 people to see if they claimed this small income on their returns?  I just tell the models to include it as other income on their 1040's since they are not really self employed. 

Are my tracks covered... or am I telling people to lie and try to cheat the IRS out of tax money owed?  I would really hate to file 25 1099-MISC forms for payments of $350 each.  Do I need to do this just to cover my ass?

Ricardo

Now to the point.

If the law states so then follow the law.
If the law if flawed or messed up then why beat yourself up.

I have been aware of this fact for some years.

Gratifixation M wrote:
First let me say... the "search" function on MM truly sucks!!!

What I would like to know is... the men that I work with are average joes who responded to my advertisement. They are not pro models and do not normally file a schedule C.  Also, I do not pay more than the $600 required for tax reporting on a 1099.  (My average pay is $350)

Now, I know that everyone needs to report all income if they want to be morally content with their conscience, but how strictly is this enforced, if at all?  I know the IRS is not interested in income of less than $600, but multiply $350 by 25 models per year and I am shelling out almost $9,000 to various people tax-free because they are being paid as independent contractors (as they should be) and not employees. 

Would the IRS honestly waste the time of 25 people to see if they claimed this small income on their returns?  I just tell the models to include it as other income on their 1040's since they are not really self employed. 

Are my tracks covered... or am I telling people to lie and try to cheat the IRS out of tax money owed?  I would really hate to file 25 1099-MISC forms for payments of $350 each.  Do I need to do this just to cover my ass?

Ricardo

Worry about yourself.  Talk with the IRS or other tax law specialist to get your answer.

Gratifixation M wrote:
Obviously, I have no control over whether or not someone included certain income on their tax returns.

What I should have stressed is... am I filing 1099-MISC forms for small payments of $350... or does the IRS not audit for amounts under $600 and therefore I am not even required to file them that small?

check www.irs.gov for this information. it's a great resource. I'm on that site every other day and I can easily find what I need. I do believe that if the amount is under $600 you need not give them a 1099. double check this on the website though. search "filing 1099's"

Gratifixation M wrote:
Thanks for your comments Jessalyn!  LOVE your portfolio by the way.  My real one will start to take shape in early January.

I have one last tax thing:  I've managed to rake up about $8,000 in tax deductions this year since I started my business in October (this includes the $2,000 that I am paying to various models)

What really sucks is... I either need to deduct 100% of the expenses this year as a Section 179 immediate deduction, or I must depreciate most of them over 5 or so years as "start up costs" because my income will not start to come in until 2007.

So under 179, I get a bigger tax return this year (about $1,200 more)... but that $8,000 would be better off deducted in 2007 since it would lower my taxable income and not be subject to that whopping 28.6% tax (costing me $2,288!!)

Is there any way to delay a section 179 deduction until the following tax year?

I'm making my appointment with H&R Block next week...

Section 179 is only used to immediatly expense depreciation that otherwise would have been spread out over the life of an asset. it sounds like you are talking about business expenses, not assets, so this section does not apply in your situation. sorry.

EDIT: it DOES sound like you are talking about depreciable property. I reread your post. but it has to be personal property (no not personal use property) as defined by the IRS. this will be something to consult with HR block about

Gratifixation M wrote:
That SUCKS that I can't deduct them in full next year instead of '06.

like I said, that MAY be the case. check with your accountant.

Michael Fryd wrote:
Of course, the most important rule is that you not take tax advice from strangers on the web.  Please consult your local tax professional.

if I were giving tax advice I would be suggesting a course of action for him to take. I gave no advice, I told him what the law says. For areas where he did ask for advice I said to consult irs.gov or his tax accountant.