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Which is the right category, Membership Fee or Commission Sharing?

Forum|Forum|6 years ago
February 17, 2020
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Hello,

I started my home inspection business this year and was trained and provided help through another inspection company. I am a solo-proprietor and have my own business. The guy that helped train and continues to help me has his own as well. I give him 5% of my monthly earnings in return for the training and the continued help, I pay this at the end of every month. Would I file this as a sort of membership (legal and professional fees), or would i give him a 1099-MISC and file it as commission sharing?

Thank you for any help

TurboTax Home & Biz Windows

Best answer by HelenC12

Give him a 1099-MISC form. Enter the amount in Box 3, Other Income Payments.

Quick Employer Forms helps small business owners like yourself quickly and easily create 099-MISC. For additional information, click here.

Per IRS instructions, file Form 1099-MISC for each person to whom you have paid during the year:

At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
At least $600 in:
- Rents.
- Services performed by someone who is not your employee.
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.

H

HelenC12Answer

Give him a 1099-MISC form. Enter the amount in Box 3, Other Income Payments.

Quick Employer Forms helps small business owners like yourself quickly and easily create 099-MISC. For additional information, click here.

Per IRS instructions, file Form 1099-MISC for each person to whom you have paid during the year:

At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
At least $600 in:
- Rents.
- Services performed by someone who is not your employee.
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.