Doing business with another business

[Cooknn]

For the last 2 years I've been shooting virtual tours for real estate as a part time extra income kinda thing. All business expenses and income were kept separate from my personal stuff using Quickbooks. Change in the real estate market has led to a dramatic decrease in jobs for me the last several months though, so this month I hooked up with an outfit that is still very busy. They will feed me as much as I can handle. They charge 20% more than I did and I get to keep 2/3 of everything I bring in so it's not a bad deal. For their records I will be filling out a 1099 and working as a subcontractor. They won't be taking out any taxes.

Question:
Can I continue to keep track of my related expenses and income through my business?

 

[compuwar]

For the last 2 years I've been shooting virtual tours for real estate as a part time extra income kinda thing. All business expenses and income were kept separate from my personal stuff using Quickbooks. Change in the real estate market has led to a dramatic decrease in jobs for me the last several months though, so this month I hooked up with an outfit that is still very busy. They will feed me as much as I can handle. They charge 20% more than I did and I get to keep 2/3 of everything I bring in so it's not a bad deal. For their records I will be filling out a 1099 and working as a subcontractor. They won't be taking out any taxes.

Question:
Can I continue to keep track of my related expenses and income through my business?

(Disclaimer, I don't work as a tax anything, take it all with a grain of salt.)

If you sign the contract as your business (make sure you're happy with the copyright assignment and usage) *and* the tax ID they use is that of your business, then you should be just fine. If they use your SSN, and you sign as you, then nope. This will also affect liability and insurance- so I'd press for them to allow you to do it as your company for tax purposes and if you don't already have it, go get some good business insurance. If they won't play well with that, then go get the insurance yourself-- include liability and E&O at the least, but spend time talking to a broker.

 

[iGary]

Question:
Can I continue to keep track of my related expenses and income through my business?

Yes, as a sole proprietor.

E-mail me.

 

[compuwar]

Yes, as a sole proprietor.

E-mail me.

Doesn't that depend on how his business is originally set up?

A sole proprietorship goes on your nomal 1040 doesn't it? Doesn't that mean that his income and expenses get taken out directly, not run through the company?

If he's set up a Subchapter S or LLC, then his SSN on the 1099 isn't going to wash with running the money through his company without personal tax liability is it?

 

[Cooknn]

Compuwar & iGary - I appreciate the conversation regarding my issue. I knew I'd most likely have to seek out professional advice, but I was hoping for some direction which you've provided I was thinking I'd have to use the company name when I fill out their paperwork... I have an LLC, BTW.

 

[iGary]

Compuwar & iGary - I appreciate the conversation regarding my issue. I knew I'd most likely have to seek out professional advice, but I was hoping for some direction which you've provided I was thinking I'd have to use the company name when I fill out their paperwork... I have an LLC, BTW.

I have an LLC, but run my medical expenses, business expenses--blah de blah de blah through the company.

At the end of the day, I run it through as a sole proprietor for my income portion and file a business return for property, depreciation etc.

An accountant can help you take advantage of all the deductions that will be advantageous for your situation.

A sole proprietorship goes on your nomal 1040 doesn't it? Doesn't that mean that his income and expenses get taken out directly, not run through the company?

If he's set up a Subchapter S or LLC, then his SSN on the 1099 isn't going to wash with running the money through his company without personal tax liability is it?

Yes, a sole proprietorship goes on your 1040---the 1099 gets filed on the company basically you report your income from the company (draws) for your 1040. The company portion is profit and loss for the company.

 

[compuwar]

Compuwar & iGary - I appreciate the conversation regarding my issue. I knew I'd most likely have to seek out professional advice, but I was hoping for some direction which you've provided I was thinking I'd have to use the company name when I fill out their paperwork... I have an LLC, BTW.

You'll also have to make sure the LLC's tax ID is on the 1099, not your SSN. As I said though- make sure you have the copyright and liability issues covered both contractually and for liability and E&O by insurance- it's easier to cut if you have to with an LLC, but it's not a perfect shield. Outside of E&O, liability and equipment coverage is darned cheap- I pay $500/yr for unscheduled coverage on my equipment as well as liability and about all that's not covered are errors and omissions, earthquake and flood damage.

 

[Cooknn]

You'll also have to make sure the LLC's tax ID is on the 1099, not your SSN. As I said though- make sure you have the copyright and liability issues covered both contractually and for liability and E&O by insurance- it's easier to cut if you have to with an LLC, but it's not a perfect shield. Outside of E&O, liability and equipment coverage is darned cheap- I pay $500/yr for unscheduled coverage on my equipment as well as liability and about all that's not covered are errors and omissions, earthquake and flood damage.

Thanks. I've got equipment coverage that includes liablility as well.