Using contracted labor on schedule C

Can I use contracted labor if the client did not issue 1099's to the people it paid?

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Level 13

I wouldn't. As soon as your total exceeds $599, the IRS will ask about 1099s issued.

ps Why would you prepare a return for a taxpayer who did not issue 1099s for contract labor, for those who were paid more than $599?

** I am "Elevating with Intention!"

Level 15

Let's be realistic. Not every 1099 that should be issued gets issued. That doesn't make the expense non-deductible to the taxpayer.

Level 15

I would. IRS could issue a penalty for not filing 1099s but they would not disallow the expense.

Level 15

"IRS could issue a penalty for not filing 1099s but they would not disallow the expense."

Sure, because what could possibly go wrong, other than, penalties and being found subject to worker misclassification?

Don't yell at us; we're volunteers

Level 15

Sure, because what could possibly go wrong, other than, penalties and being found subject to worker misclassification?

The OP isn't asking if the classification is correct. Who says it is not contract labor?? Just you - how do you know - you don't.

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