On Thu, 02 Apr 2009 20:08:08 -0700, Darren New wrote:

> Jim Henderson wrote:
>> That's sales tax, not income tax.
> 
> That's not what I'm talking about.  I'm talking about income tax.

So am I.  But you said:

"Otherwise, you wouldn't pay income tax if you had 10,000 customers a 
year each buy $20 of stuff from you."

*That* is sales tax.

>> From a personal income tax standpoint, the law states that < $600 isn't
>> taxed (at the federal level, state laws may differ).
> 
> Yes. But $60,000 is, even if it comes from 200 different contract jobs.
> Don't you think?  I mean, I'm not going to sit down and grub thru the
> income tax laws *again*, since I just finished that earlier this week,
> but it wouldn't make sense, would it?

Does *anyone* think the tax laws make sense?  I sure don't.

>> I don't know that it was the IRS that we had to talk to - seems it was
>> someone here in the state of Utah offices, not the feds.
> 
> 503(c) is a reference to the IRS tax laws, just like 401(k) is. I don't
> doubt you talked to someone in the Utah offices also.

Well, like I said, I'd have to check with our treasurer.  She said she 
"got it sorted out with the state", so I assume the state issued the 
certificate, and the feds accept that.

>>> Did you take them as an individual, or a corporation, or what?
>> Individual.
> 
> Well, a corporation has to report everything, even if they don't get a
> 1099.

Yes, but we were talking about individual income tax?

Oh, wait, I think I see now where the misunderstanding is.  We're talking 
at cross-purposes again.  We got on the subject of income tax and I 
assumed "individual" and you are talking about for an entity, not an 
individual.

> As an individual, I don't see anything on 1099-MISC that says the amount
> isn't taxable. It looks like it goes into Schedule C, according to the
> instructions.
> 
> Now, if it's <$600, you don't get a 1099 at all, but I'm pretty sure
> that doesn't *legally* let you off the hook for reporting it. It just
> means the IRS isn't going to be able to catch you easily.

I got a 1099 for <$600.

But I suppose "not going to be able to catch you easily" also translates 
to "not worth their while".

But on my individual income taxes back when I got the advance (which was 
more than $600 and I got nailed for the taxes, or would have if the 
expenditure hadn't been tax-deductible), I talked to a tax accountant 
about the situation, and he explained it to me then.

Now that was almost 15 years ago, too.

>>> One payment of $500 to an individual will likely not get you in
>>> trouble. You're supposed to report it, but there's no proof.
>> 
>> The 1099 that the publisher submitted clearly stated that there was no
>> tax liability that they reported, and did include the figures IIRC for
>> the amount of royalties.
> 
> Huh. Very weird. Because that's not anywhere on the 1099. I can't
> imagine they *did* send you a 1099 and you didn't have to report the
> income.

Now I'll have to find the form.   It may be that I'm just remembering the 
boxes saying "0" for what was owed on it.  We did file our taxes before 
that one came in, though - I think this year it was actually < $100.  
Nonfiction books for a very small segment of a targeted market segment 
tend not to be real moneymakers.  Just a good way to get your name known

> I do love box 13 for 2009: "Excess Golden Parachute Payments."

LOL, that's a good one.

Jim

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