[Jewelry making - Article 00039] - Re: [Orchid] Consignment and taxes

[Bethkatz]

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Alma,

    Uncle Sam has the upper hand in this situation. You are considered
    an independent contractor and as such, the gallery owner has to file
    a form 1099 with the IRS, this of course requires your social
    security number. The money you were paid is considered income to you. 

    There were actual sales made and you received money for your
    product, no matter what your part of the retail sale you received. 

    The form 1099 must be filed if you were paid over $600.00. Some
    gallery owners prefer to file the 1099 no matter what amount is paid
    to the artist. Many artists do not consider that they will have to
    pay taxes (if applicable) on the additional income. This arrangement
    for the gallery owner allows the gallery to save the additional money
    that is required to be paid to the government for the social security
    and Medicare taxes were you a regular employee......... You may now
    have an additional liability when you pay your 2005 income taxes, you
    may not, check with your income tax preparer for exact information
    and proper filing of income taxes. 

Beth Katz Unique Solutions, Inc.
Paste Solder and Powder Solder for Jewelers and Metalsmiths
www.myuniquesolutions.com

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