well let me start off... i am a sole proprietor of my business craftycash. now i wanted to know that when i pay out people under 599 dollars how do i report that to the irs? what do i need to report it to them? i have there address and the amount but i don't actually have their social security number.

do i need to keep notes of who i paid and the amount that i paid them? if so what would be the best way or program to get for this?

thanks very much.

I'm sure that if you intend to deduct these payouts, you're supposed to get SS#'s and issue 1099s, though I imagine that copies of the cancelled checks would be sufficient proof for the IRS that moneys were paid out.

Your best bet would be to make a tax deductable investment in a consultation with a professional specializing in small business accounting.

quote:

tax deductable investment

yeah, but you don't need a ssn or 1099 if the person hasn't made over 599.

also what is a tax deductable investment?

What I meant was that the money you spend having a tax professional advise you and get you set up with a record keeping system is a legitimate business expense and is deductable.