1099 Question

[Pancur]

Hi,

2010 was my first year in the business as agency. Shouldn't I be receving 1099 forms from the insurance companies that paid me commission?

Thanks,

 

[Josh]

Yes you should.

 

[GA in GA]

Not if you didn't earn at least $600.00 from each company. You do still have to report the income though.

 

[Todd King]

One thing you have to remember: you aren't 1099'd on what you haven't earned yet, that will be on next year's 1099.

For example: you sell a policy that begins in Nov' 2010 and are advance 9 months. You will have only earned 2 months at the end of the year. The other 7 months will fall into 2011 as will the 10th, 11th, and 12th month.

 

[VolAgent]

One thing you have to remember: you aren't 1099'd on what you haven't earned yet, that will be on next year's 1099.

For example: you sell a policy that begins in Nov' 2010 and are advance 9 months. You will have only earned 2 months at the end of the year. The other 7 months will fall into 2011 as will the 10th, 11th, and 12th month.

Wanna bet?

 

[Todd King]

Yep, sure do!

There are some companies that will work differently, but most work the way I just described.

 

[VolAgent]

Yep, sure do!

There are some companies that will work differently, but most work the way I just described.

The money was received in 2010, so you owe taxes on it for 2010. The vast majority of people file on a cash basis. Any insurer that doesn't report 1099 is just setting its agent's up for tax problems.

 

[sman]

I'm in agreement with Vol. I have never seen a carrier who didn't report advanced commissions in the year they were paid.

 

[xrac]

I'm in agreement with Vol. I have never seen a carrier who didn't report advanced commissions in the year they were paid.

If the company pays you the commission this year they will 1099 it to you and they will take the deduction for it as an expense this year. That is the only way I have ever seen it done.

 

[Josh]

I have never seen a carrier who didn't report advanced commissions in the year they were paid.

I've definitely seen it both ways. I believe RNA did it to me (1099'd me when it was earned, not paid).