Technical topics regarding tax preparation.
1099-MISC when services & goods provided
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14-Jan-2020 2:58pm

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?

14-Jan-2020 5:53pm

... can't find something more authoritative on the subject, .... That's for sure not authoritative.

Try RR 81-232.

14-Jan-2020 6:46pm

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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