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January 17, 2011

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secret agent girl

Sorry you were audited.

When you were audited, did the person give you a publication number or URL to the documentation of this requirement? I'd like to have direct access to this information.

I have consulted with several accountants and talked with many savvy therapists in private practice, and not heard this before. If I have the "cite" I can (and will) share it far and wide in my network!

Thanks for alerting us to this.

secret agent girl

This page seems to indicate the 1099 is required if one is paying a "person"; it doesn't mention payments made to corporations:
http://www.irs.gov/instructions/i1099msc/ar02.html

And this article seems to confirm that, and goes on to say that in 2012 the law will be expanded to apply to all entities:
http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

I pay my rent to a corporation, so it appears that for now, I don't have to send a 1099 to them until 2012. I pay for supervision/consultation to a couple individuals, but while they are self-employed and "people", they may actually be providing services as a corporation, depending on how they have set up their businesses.

So now I'm confused...

PS: Do you have any clues on how you got selected for an audit?

Nancy Smyth

My accountant educated me about this 1099 stuff, Robin..I was very grateful to her. When I mentioned it to other therapists they looked at me like I was crazy, so I think it's great that you're sharing what you've learned about this here.

@Secret Agent Girl: I think that if you are writing the check to an individual then you need to file a 1099. It seems to me that your check would need to be written to the corporation for it to be considered payment to the corporation.

Robin Shapiro

Secret Agent Girl, If you write it to a person who is incorporated, you dont have to do a 1099.

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