How to handle commercial videography taxes?

C

commercialguy

Member
Are there any good books or guides out there? I shot a commercial video and paid someone over $1,000 but did not withold taxes from their pay, it says so in there contract but they are asking if any tax forms need to be sent. Am I still responsible to send tax forms to them, they weren't employees but contract labor according to the contract they signed?
 
In the USA, you are not responsible for withholding if you paid the person as a contractor.
However, if the amount is over $600, you need to have your contractor fill out a W-9.
Then, with the informaton that the W-9 gives you, you need to order from the IRS and then file a 1099-MISC and send a copy to them and to the IRS. No money is due from you on this front, it's basically just to make a paper trail to tell the Gov that your contractor knows about the income, and insure that no taxes are dodged. You have missed the deadline, but I doubt that will be a serious problem for $1,000.

Read this to understand.
http://www.irs.gov/Businesses/Small...-Associated-Taxes-for-Independent-Contractors

If you are like me and believe that people should be able to file their own legally obligated taxes without paying someone else to do it in this fair country, you may find that the IRS itself is a pretty good resource. I have called them with tax questions many, many times. Just be ready to wait on hold, but they will help you, and your questions will not trigger an audit or anything like that.

I am not a CPA, so if you get one who says differently, follow his/her advice instead. But it is fairly straightforward.
 
Last edited:
David Jimerson said:
^^^^^^^^^

Yes.

Some things you can do yourself. This isn't one.
Click to expand...

I respectfully disagree! it's all about your comfort level with (an interest in) tax law. Believe it or not, CPAs all start off as normal people.
I have called the IRS to order 1099-MISC forms for my contractors before, and it is not hard at all.
 
I would suggest that you may have no idea what you're missing in terms of deductions, depreciations, etc.

CPAs do indeed start off as normal people (some might suggest they still are normal people :) ), but what makes them CPAs is that they're trained to do specifically what the job calls for. Tax law is exceedingly complex. I took it at the law school level and did fine with it, but I'd never put my fate into my own hands in that regard. There are times when it's in your best interest to hire an expert, and for 99.5% of people, this is one.
 
As others have said, you need to fill out and send the individual a 1099-MISC form. You can purchase these forms at any office supply store (sadly, they are not printable). Contrary to what some have said, you haven't missed the important deadline, you've only missed the deadline to hand over your form to the contractor. This deadline was January 31st. This deadline doesn't matter as much because no one will ever know if you missed it unless the contractor complains to the IRS. Basically it serves as a 30-day grace period where the contractor can say "wait, there are mistakes on this form." You have to then mail the 1099-MISC form along with a 1096 summary form to the IRS by February 28th. If you're filing electronically, I believe the deadline is later.

If you don't feel comfortable with doing this yourself, you should, as others have recommended, talk to a CPA. This is great advice that you should heed. They'll do all the work for you for less than you'd expect.
 
ASchear said:
As others have said, you need to fill out and send the individual a 1099-MISC form. You can purchase these forms at any office supply store (sadly, they are not printable).
Click to expand...

If you do decide to exercise your freedom to pay your own taxes, don't spend money on these forms. They are free from the IRS. Seriously, the IRS is awesome to deal with (if you have the luxury to do it on your own terms). Make a list of your questions and call them today!
 
David Jimerson said:
^^^^^^^^^

Yes.

Some things you can do yourself. This isn't one. You will probably have to file a 1099. The accountant will know, and which 1099.
Click to expand...

I do it all the time myself. Have done all my own taxes
ever since I started my business. Was audited once as the
IRS felt I owed them money. After the audit was over, my
original return was proved to be correct. I did have to supply
receipts and other documents in two areas but no big deal.
I don't run a huge business. It's small enough that I can keep
track of my own expenses, deductions and so on fairly easily.
I keep forms on hand to give to contractors to fill out at the job
site before I pay them. It's honestly not that big a deal.
 
Last edited:
alaskacameradude said:
I do it all the time myself. Have done all my own taxes
ever since I started my business. Was audited once as the
IRS felt I owed them money. After the audit was over, my
original return was proved to be correct. I did have to supply
receipts and other documents in two areas but no big deal.
I don't run a huge business. It's small enough that I can keep
track of my own expenses, deductions and so on fairly easily.
I keep forms on hand to give to contractors to fill out at the job
site before I pay them. It's honestly not that big a deal.
Click to expand...

Glad it works out for you, but I wouldn't recommend it for most people.
 
Finn Yarbrough said:
I respectfully disagree! it's all about your comfort level with (an interest in) tax law.
Click to expand...

Fair enough, but my time is valuable. I'd rather pay my accountant X amount of dollars and let him monkey around with the paperwork while I stay busy shooting & editing.

If you've got the time to bang out your taxes and do it right, God bless you!
 
Assuming US tax is like UK tax, then doing it yourself is easy, BUT making an error costly. Here, the premise seems to be that if you don't deduct taxes when you should, then you, rather than the other party are liable. We have two main statuses employed or self-employed. It is impossible to check if a sub-contractor you select is a 'proper' self-employed person, so you have to take an educated guess. It's not just tax but we have something called national insurance which funds our free healthcare and old age pensions. The employee pays some and the employer does too. Self employed people have a different scheme. One very big company I do work for asked for advice from the government on certain contracts they issue. They were told NO you do not need to pay it. A few years later they were told the advice was wrong and they now owed half a million pounds in unpaid NI.

If you understand tax, and can stand the risk, then do it yourself. Me, I happily pay an expert and they ALWAYS save me money. I work for a couple of clients who deduct tax from me and will not accept an invoice. If I wish to work for them, I accept it, and the accountant offsets what I pay against my tax at the year end. Is the US similar?
 
paulears said:
Assuming US tax is like UK tax, then doing it yourself is easy, BUT making an error costly. Here, the premise seems to be that if you don't deduct taxes when you should, then you, rather than the other party are liable. We have two main statuses employed or self-employed. It is impossible to check if a sub-contractor you select is a 'proper' self-employed person, so you have to take an educated guess. It's not just tax but we have something called national insurance which funds our free healthcare and old age pensions. The employee pays some and the employer does too. Self employed people have a different scheme. One very big company I do work for asked for advice from the government on certain contracts they issue. They were told NO you do not need to pay it. A few years later they were told the advice was wrong and they now owed half a million pounds in unpaid NI.

If you understand tax, and can stand the risk, then do it yourself. Me, I happily pay an expert and they ALWAYS save me money. I work for a couple of clients who deduct tax from me and will not accept an invoice. If I wish to work for them, I accept it, and the accountant offsets what I pay against my tax at the year end. Is the US similar?
Click to expand...

Seems different here to me. Here it is usually pretty clear if you are self employed or not. I'm not a
permanent employee of any company, I do contract video work for several businesses, work of a temporary nature. Although good clients may hire me several times a year for different
projects. Hence, I'm self employed. When I hire help (camera ops for larger jobs) they are self employed and I do not have to withhold taxes. We also have no national healthcare (although the government now offsets some of the cost of it for lower income citizens) and we also have Social Security tax. None of this is withheld by me, I just submit paperwork to the IRS showing what I paid my subcontractors. They figure out their own taxes, I am just making sure they don't cheat, by
reporting their income to the IRS. If any of my clients tried to withhold taxes from my paycheck
they would not be ever getting my services again. I receive none of the benefits of a full time
employee so dont treat me like one. Just pay me my money, and I'll write off every bit I legally
can and only pay tax on my net income. Report what you paid me to the IRS just as I do
for those I hire.
 
Last edited:
alaskacameradude said:
Seems different here to me. Here it is usually pretty clear if you are self employed or not. I'm not a
permanent employee of any company, I do contract video work for several businesses, work of a temporary nature. Although good clients may hire me several times a year for different
projects. Hence, I'm self employed. When I hire help (camera ops for larger jobs) they are self employed and I do not have to withhold taxes. We also have no national healthcare (although the government now offsets some of the cost of it for lower income citizens) and we also have Social Security tax. None of this is withheld by me, I just submit paperwork to the IRS showing what I paid my subcontractors. They figure out their own taxes, I am just making sure they don't cheat, by
reporting their income to the IRS. If any of my clients tried to withhold taxes from my paycheck
they would not be ever getting my services again. I receive none of the benefits of a full time
employee so dont treat me like one. Just pay me my money, and I'll write off every bit I legally
can and only pay tax on my net income. Report what you paid me to the IRS just as I do
for those I hire.
Click to expand...

It seems like you're talking about filing your personal taxes, and not business taxes, as the OP asked about. They're really pretty different things.

If you are operating without some kind of business structure separate from your personal finances, you may want to rethink it. The best options for that are the kinds of things a CPA or attorney will be able to tell you.
 
paulears said:
Assuming US tax is like UK tax, then doing it yourself is easy, BUT making an error costly. Here, the premise seems to be that if you don't deduct taxes when you should, then you, rather than the other party are liable. We have two main statuses employed or self-employed. It is impossible to check if a sub-contractor you select is a 'proper' self-employed person, so you have to take an educated guess. It's not just tax but we have something called national insurance which funds our free healthcare and old age pensions. The employee pays some and the employer does too. Self employed people have a different scheme. One very big company I do work for asked for advice from the government on certain contracts they issue. They were told NO you do not need to pay it. A few years later they were told the advice was wrong and they now owed half a million pounds in unpaid NI.

If you understand tax, and can stand the risk, then do it yourself. Me, I happily pay an expert and they ALWAYS save me money. I work for a couple of clients who deduct tax from me and will not accept an invoice. If I wish to work for them, I accept it, and the accountant offsets what I pay against my tax at the year end. Is the US similar?
Click to expand...

It's called different things here (like FICA instead of NI), but it's not terribly different in the broad strokes.
 
David Jimerson said:
It seems like you're talking about filing your personal taxes, and not business taxes, as the OP asked about. They're really pretty different things.

If you are operating without some kind of business structure separate from your personal finances, you may want to rethink it. The best options for that are the kinds of things a CPA or attorney will be able to tell you.
Click to expand...

As I am a sole proprietor, and do not have any other job, my business taxes are my personal
taxes. I do not have seperate 'personal finances'. My friend is a CPA and she has told me
that I am maximizing my money in my situation, she could not save me any money over
what I am doing. Now if you are a big business and make lots of money, that's another thing.
 
Last edited:
alaskacameradude said:
As I am a sole proprietor, and do not have any other job, my business taxes are my personal
taxes. I do not have seperate 'personal finances'. My friend is a CPA and she has told me
that I am maximizing my money in my situation, she could not save me any money over
what I am doing. Now if you are a big business and make lots of money, that's one thing.
Click to expand...

Same here. Sole proprietor. Never had any problem doing my own taxes for the past 42 years.
 
Well, you guys have been doing what you're doing, and that's fine.

But I would suggest to the OP and anyone starting a business to look at all the options and seek advice as to the best way to proceed. It's not just saving money in taxes which is the advantage of keeping your business and personal finances separate. There are many other considerations, too, and that's even for people who work only for themselves and don't have any other employees.
 
You must log in or register to reply here.
Back
Top