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1099-MISC when services & goods provided

Technical topics regarding tax preparation.
#1
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37
Joined:
26-May-2016 12:53pm
Location:
Hartford, CT
Have a few clients who pay their IT service contractors for a mix of services and goods (hardware, computers, in addition to the IT services like installation, consulting, security). When issuing 1099-MISC, do the goods need to be backed out of total amount reported?

I've found conflicting answers on this. Most sources just say goods are excluded from 1099-MISC, but don't go into detail. This seems to be the most direct discussion I've found: "You don't have to send a 1099-MISC to a party that provides you only with goods. (See the comment above.) For example, you buy auto parts from a local distributor and one of your employees repairs the vehicles. But a 1099 is required to an auto repair shop even if the value of the services is relatively small. For example, it's $2300 for the parts; $150 for the labor. The 1099-MISC should be for $2450."
Source: http://www.smbiz.com/sbspec321.html

I've searched & searched, & can't find something more authoritative on the subject, 1099-MISC instructions included. Anyone have some info on this?
 

#2
Nilodop  
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12280
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Location:
Pennsylvania
... can't find something more authoritative on the subject, .... That's for sure not authoritative.

Try RR 81-232.
 

#3
Posts:
37
Joined:
26-May-2016 12:53pm
Location:
Hartford, CT
Nilodop wrote:... can't find something more authoritative on the subject, .... That's for sure not authoritative.

Try RR 81-232.


That is exactly what I'm looking for. Thanks, you've been supremely helpful.
 


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