Payroll question

[Immy]

Well our CPA has decided to be closed Jan. 2nd (what's up with that?) so I got a payroll question for anyone who happens to know.

We have a private contracted worker who receives a 1099 instead of a W-2. So I'm counting up how much we've paid this person this year so I can send the total to our CPA, and I realize we haven't paid her in fully yet for some of her 2011 work. She's aware of it and doesn't mind being paid at a later date (she's a saint!).

Question: Which amount do I send to the CPA - the total only actually paid or the total paid plus what's still due?

Example: We've paid her $18,000 already but we owe another $2,000. Do I send the CPA a total of $18K or $20K?

Thanks for all answers from people who are smarter than me!

And Happy New Year!!

 

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[Red James Cash]

Just send both. Make sure you clarify all the information.

 

[CaptainRobin]

I kinda/sorta agree with RJC... but the thing is, you AIN'T paid the outstanding balance from last year, for 2011, therefore those dollars ain't on last year's 1099. They'll be on the '12 1099 when your helper receives them. Settle your debts, pay your help, and the circle will be complete. It ain't for you to take care of someone else's taxes. Your help has to decide what she claims, and you (for your safety) have to be ABLE to show when and for what you paid for if'n you're doing 1099s. I'm just a "s-house lawyer" as we used to say in the military, don't take this as gospel, I ain't got a law degree, but one should always cover their backside. You didn't pay the dollars in 2011 ~ therefore they shouldn't show. They will/should show THIS year, 2012.

If'n your help takes care of you, you should take care of your help. Just Robin's way of looking at things....
Robin

 

[Immy]

I kinda/sorta agree with RJC... but the thing is, you AIN'T paid the outstanding balance from last year, for 2011, therefore those dollars ain't on last year's 1099. They'll be on the '12 1099 when your helper receives them.

That's kinda the way I was thinking - actual money paid. 'Preciate the insight!

 

[mikeofaustin]

Yep, only money that was paid (it's a deductible BTW). And next year, you claim the rest. Been doing Business taxes for years.

 

[Immy]

Thanks Mike!

 

[packerbacker]

Will adding the 2 grand to this year's earnings put her in a higher tax bracket for 2012?

 

[Immy]

Probably not Mike. Her yearly earnings are steadily $20-$25K.