Per the IRS code, Initials, Inc does have to include all earned incentives (i.e., iPads, laptops) on the 1099-MISC. However, as a CP, you can turn around and deduct the amount for the laptop and iPad amount under the 179 Deductions for the fixed assets if used for business 'exclusively.' Items like shopping sprees and free product would be based on how they are used and could be different for each CP. For example: If the shopping spree and free product is being used as marketing tools at parties, then they can be written off as an expense. On the contrary, if they are used for personal consumption, then they cannot do not qualify as an expense. You can find a break down of your 1099 amounts in iOffice under Accounts - 1099 Incentive Account. As always, please consult your professional tax advisor for your specific situation.
Have more questions? Submit a request