- 1,912
Request the info from the carrier. Some carriers only 1099 on warned commission as well.
Anyone missing 1099s?
- Thread starter Meghan28
- Start date
- 7,015
I never use 1099s. I export my biz checking acccount.
Doesn't it all equal out in the end?
I was told, years ago, that you have to pick one way of doing things, either 1099 or profit/loss.
Doesn't it all equal out in the end?
I was told, years ago, that you have to pick one way of doing things, either 1099 or profit/loss.
- 1,912
Thats incorrect. You can still be profitable, but classify your advance balance as deferred income, and actually show a loss. I have saved alot of money using this technique.
I dont file my own taxes, and I dont have a copy with me at the moment to look up what form my CPA used, but I will look it up on Monday and let you know.
This technique is especially helpful for new agents that are just getting into business, it will help with cashflow.
- 7,145
I deleted my earlier posts in the thread because I saw posts that made it look like the insurance co payments were quite specialized.
Your comment is what I was thinking in regard to cash vs accrual bookkeeping. My problem with the accrual stuff is that you engage in some kind of activity to defer income or expense in one year for tax purposes, and then you have a special set of records you have to keep up for several years, or a general procedure you have to follow for the life of the business.
I don't know enough about taxes to be certain about this, but it seems like if one generates similar sales volumes year after year that it would average out. The problem places are probably things like: starting out, a year with a big loss, or a year with a big spike.
- 1,912
Or a year like 2018 when taxes are much lower.
- 1,410
When I first did my taxes for the first time as an agent I just did it based upon my bank account statements. I was going to owe a lot.
So, before I submitted it, I decided to just go off my 1099s which reflected only "earned" commissions. I paid significantly less. It helped a lot since I was just starting out. I highly recommend all first year agents do it that way!
So, before I submitted it, I decided to just go off my 1099s which reflected only "earned" commissions. I paid significantly less. It helped a lot since I was just starting out. I highly recommend all first year agents do it that way!
- 5,997
Anyone who receives a 1099 ought to go off of the 1099 amount. The unearned advances will flow to the following year's 1099, with the added benefit that any charge backs against those unearned advances will be factored in to the next year 1099 total. If you go off of your bank account, you will pay taxes on unearned advances, a portion of which will be charged back during the following tax period. In other words, if you go off your bank deposits rather than the 1099's you WILL pay taxes on income that you never have and never will receive due to charge backs. I am not a CPA, and all y'all should check with your own one. But I am pretty sure that I am right. Not being a CPA, I will allow for the possibility that a CPA comes along and proves me wrong.
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Which cost saving will be offset by paying the CPA at $150 to $225 per hour to keep up more complicated tax records.
- 30,592
Cough cough...Welfare Fraud...cough cough
Seriously?
Most years my agency has a loss or small profit, but I can assure you I do not qualify for Medicaid or food stamps.
Most agents would do well to operate on a cash basis vs accrual. Much easier to follow.
If you are ever audited they will look at cash flow. If you run commissions through a corp (not Sub-S) or LLC you better know how to segregate business expenses from personal. And the auditor will probably look at your business returns as well as personal.
A paper trail will be very helpful.
I see what you did there Monkey Man . . . .
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