I need some accounting help here--who should I give my 1099s to?
I am a marketing consultant with an LLC and I work alone. I sell event sponsorships for a local business who is the promoter of the events. I receive 20 percent on anything I sell. Many times I negotiate with the customers and they are billed for the sponsorship through my LLC. Once I am paid by customers, I immediately pay the promoter the sponsorsip money and I take my 20 percent. Do I have to give the promoter a 1099 on the money I gave them? Would it be better to have the promoter bill the customer and the promoter pay me? Please advise!
1099's are for services paid to non-incorporated businesses and individuals for services greater then $600 in a calendar year. So if you are paying your promoter for their services and they are not incorporated, then they should receive a 1099.
Many entrepreneurs want to go directly to the source the moment an idea strikes or at the first sign of growth, but you need to first prove the business to yourself before asking others to believe in it.