Parents Want To Issue Me A 1099?

[BrooklynM]

I have a family that owns their own business. Their accountant for their business is the one that mails me a check every month from their business account. Their accountant said that they want to issue me a 1099 and the mom asked me if that was ok. I'm not really sure. I've never had anyone ask this before. The only reason that I can think they would do this is because they may be trying to exceed the amount they are allowed to write off on their taxes for childcare.

Should I say it's ok to 1099? If not, what is the reason I should give? Thank you in advance!

[sahm1225]

A 1099 is for ano deep dent contractor, which you are not, you are self employed. I'm sure tom copeland will chime in, but I think
Your guess is right and they are attempting to claim more of their childcare expenses by saying you were an independent contractor.

I would tell them that you need to consult your tax person before they issue you anything

[sharlan]

I would say no. You are providing daycare for the parents, not their business.

You would give the parents a W-10.

(Please correct me if I am wrong.)

[TheGoodLife]

I would say no. You are providing daycare for the parents, not their business.

You would give the parents a W-10.

(Please correct me if I am wrong.)

Yes, you are providing a personal service (personal for them, I mean) and a 1099 is for businesses. You would not use a 1099, you are not an employee or contractor for their business.

[BrooklynM]

Thank you! Would it affect me as far as my taxes go?

[Blackcat31]

From my understanding, Forms 1099-MISC are only filed by businesses to report payments to service providers in the course of doing business.

Private citizens are never required to prepare them for personal expenditures.

Also I believe because the care takes place in YOUR home that they cannot issue a 1099 to you and simply need to claim the expense on their personal taxes via w-10 FORM.

1099-MISC is so that a business claims an expense and the families business does not have a child care expense, the owner of the business does but not the business itself.

[TheGoodLife]

From my understanding, Forms 1099-MISC are only filed by businesses to report payments to service providers in the course of doing business.

Private citizens are never required to prepare them for personal expenditures.

Also I believe because the care takes place in YOUR home that they cannot issue a 1099 to you and simply need to claim the expense on their personal taxes via w-10 FORM.

1099-MISC is so that a business claims an expense and the families business does not have a child care expense, the owner of the business does but not the business itself.

I would just let the DCM know that you provide a personal service for their child, not one that pertains to their business, and that they will be getting a statement or a W-10, whichever you give out at the end of the year

[AmyKidsCo]

Personally I think they're in a gray area having their business accountant pay for child care from their business account. But it's not my problem...

[TomCopeland]

1099

I have a family that owns their own business. Their accountant for their business is the one that mails me a check every month from their business account. Their accountant said that they want to issue me a 1099 and the mom asked me if that was ok. I'm not really sure. I've never had anyone ask this before. The only reason that I can think they would do this is because they may be trying to exceed the amount they are allowed to write off on their taxes for childcare.

Should I say it's ok to 1099? If not, what is the reason I should give? Thank you in advance!

Do not issue parents a 1099. First, it's not a business expense to the parent, so writing the check out of their business account is wrong. Second, it's a personal child care tax credit based on paying for child care. Third, the instructions to Form 2441 that the parent fills out when claiming this credit says the parent must give the provider Form W-10, not Form 1099. You can fill out Form W-10 and give it to the parent if you want.

[Play Care]

Do not issue parents a 1099. First, it's not a business expense to the parent, so writing the check out of their business account is wrong. Second, it's a personal child care tax credit based on paying for child care. Third, the instructions to Form 2441 that the parent fills out when claiming this credit says the parent must give the provider Form W-10, not Form 1099. You can fill out Form W-10 and give it to the parent if you want.

The parents want to issue the provider a 1099, not have the provider issue them a 1099.

So - what do you do when your day care client wants to issue you a 1099?
I've seen this question come up in parenting boards (parents saying they were advised to issue their day care provider a 1099) so I am curious as to what the answer is.

[Heidi]

I say they can ISSUE you what ever they want. They can leave it on your desk, push it into your hand, or leave it in your bathroom and make themselves think that means something.

Come an audit, though, they are going to have to deal with it. The OP just needs to make sure she claims the income correctly. What THEY do isn't her concern.

???

[TomCopeland]

1099

The parents want to issue the provider a 1099, not have the provider issue them a 1099.

So - what do you do when your day care client wants to issue you a 1099?
I've seen this question come up in parenting boards (parents saying they were advised to issue their day care provider a 1099) so I am curious as to what the answer is.

The parent shouldn't give the provider a Form 1099. If they do, the provider should identify on her tax return (Schedule C) that this amount was received via a 1099. That's because the IRS is likely to check to see if this income was reported by the provider. Without specifically identifying that the money is from a 1099 on the form, the IRS may decide to audit.