1099

Forum|Forum|2 years ago
September 14, 2023
1 reply
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I sell my company materials I find in the community cheap at cost to me. I pay in cash and receive receipts. My company is losing money so I enter in form of a loan. Do I need to give myself a 1099? I don’t personally issue a 1099 to seller when over $599. I have a single LLC

Not A Product Question

rjs

Employee

A single-member LLC is disregarded for income tax purposes. That means that, if your company is a single-member LLC, you and the company are one and the same. You can't sell anything to yourself, and you can't give yourself a loan.

A business is required to issue Form 1099-NEC for payments for services, not payments for goods.

You should consult a local accountant to get some guidance on how to keep proper accounting records for your business, and how to report the business on your tax return.

WagmAuthor

Thanks for replying! I file an 1120-S as an LLC with a single member if that makes a difference. When I enter the expense I need to credit something that’s not the bank account. Do you have a suggestion of another name for it? When I pull cash I debit the same account.

rjs

Employee

Yes, that makes a huge difference. In your original question you didn't say that the LLC has elected to be treated as an S corp. So it is not disregarded. It is an entity distinct from you personally.

But you can't just "pull cash" from an S corp. The S corp has to pay you a reasonable salary for the work that you do. Have you been doing that? If not, I urge you to consult a tax expert to make sure that your S corp is properly meeting all of its tax obligations.

Your original question was whether the S corp has to give you a 1099 for the materials that you sell to it. The answer to that question is still no, because a 1099-NEC is issued for payments for services, not for goods. But the S corp does have to give you a W-2 for the salary that it pays you.

Your questions now seem to be about what accounts to credit or debit when you make transactions with your S corp. Those are accounting questions, not tax questions. I'm not an accountant, and this is a tax forum, not an accounting forum. Maybe someone else who knows more about accounting will answer. Otherwise I again suggest that you consult a local accountant.