I have a W-9 from a sole proprietor who owns a donut shop. We have a bill to pay the donut shop $5,000. It appears this would be in the category of a bakery, so this would NOT be 1099 reportable, correct?

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Assuming the $5,000 payment is for donuts, i.e. merchandise, then no, the payment is not reportable.  If you paid the donut shop to cater an event for you, involving services, then it would be reportable. See IRS Instructions for Form 1099-MISC, page 1, specific instructions and exceptions.

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