Questions about doing Web design for companies

@tracknutOct 12.2007 — #I'll presume you're not incorporated...

When a company of any reasonable size pays you, they plan on writing off your cost as a business expense. The normal way of writing off such work is to give you a 1099 that they also include in their taxes. You use the 1099 to declare the income, they use it to declare the business expense and write it off. Even Steven. So that's "normal".

If a company pays you cash (you mean a check?), there is no formal paperwork from the IRS perspective. They are probably writing it off as an expense, and I think the lower limit on the requirement for a 1099 is somethng like $600. So if the total payment to you is less than $600 for the year, then they are allowed to expense your costs without creating a 1099 if they like.

If this is not a real business you're working for, then they may not even write off the expense.

It isn't normally your call to "require" a way for your client to pay you. You agree on terms (e.g. 1/2 payment up front, or whatever), but you can't require them to not give you a 1099 (which is tantamount to telling them you plan on not reporting the income, and you'd like their help with the scam).

In all cases, you report the income to the IRS, pay taxes on it, etc. I recommend synching up with an accountant before you go much further.

Hope that helps.

Dave

Questions about doing Web design for companies

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