Hi, can someone with an accounting and tax background recommend me the best solution to pay someone with these criteria without getting myself into trouble at year-end when our company's financial statements get audited:
1) the payee wants to be paid in the full amount (no taxes)
2) the payment must be made in check
3) a record of this payment must be recorded in the book
i asked a similar question a while ago, and most of the answers reference the use of Form 1099. but i talked to a friend of mine about using the form 1099, and he said im still gonna get in trouble for using this form 1099. however, i've done some research and this particular method of using form 1099 seems perfect for my situation. i need some professional clarification cause i don't trust my friend's insight in this technical field.
Also, if i write a check for someone and the amount is under $600, can i ignore the usage of form 1099? if i do ignore the form, wil i get in trouble for this during the audit with the financial auditors? please advise. thanks in advance.
1) the payee wants to be paid in the full amount (no taxes)
2) the payment must be made in check
3) a record of this payment must be recorded in the book
i asked a similar question a while ago, and most of the answers reference the use of Form 1099. but i talked to a friend of mine about using the form 1099, and he said im still gonna get in trouble for using this form 1099. however, i've done some research and this particular method of using form 1099 seems perfect for my situation. i need some professional clarification cause i don't trust my friend's insight in this technical field.
Also, if i write a check for someone and the amount is under $600, can i ignore the usage of form 1099? if i do ignore the form, wil i get in trouble for this during the audit with the financial auditors? please advise. thanks in advance.