UPDATES: January 15, 2020: US FORM 1099/CANADA FORM T4A INFORMATION

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UPDATES: January 15, 2020: US FORM 1099/CANADA FORM T4A INFORMATION

Blythe Klipple

US FORM 1099/CANADA FORM T4A INFORMATION


You may have seen an email from Stampin’ Up! including the information below. Please be aware that this information is for reference only and should have posted as a weekly update but was mistakenly sent as an email. 

US Form 1099 Information

Note: US Form 1099 is required by the IRS to be mailed no later than January 31. Please read the box 7 and 9 information to understand if you will be sent a 1099 for the year.

January 8, 2020

Stampin’ Up! does not provide tax advice and recommends that demonstrators contact a knowledgeable advisor with any questions they may have in this regard. However, the company is providing the following information as a help to understand what is being reported on Form 1099.

Form 1099 is required to be issued to each demonstrator whose business is run as a sole proprietorship (taxed as an individual) or organized as a partnership or limited liability company that has not elected to be treated as a corporation for income tax purposes. Form 1099 is not issued to demonstrator businesses that are organized as corporations or limited liability companies that have elected to be treated as corporations for income tax purposes.

More information about income taxes and demonstrator businesses can be found in the Income Tax section of the Demonstrator Handbook.

Form 1099 Box 7 – Nonemployee Compensation

The amount shown in Box 7 reports the combination of cash paid and non-cash values awarded to demonstrators during the 2019 calendar year, but only if the combined total of these is $600.00 or more. Amounts earned during 2018, but paid or awarded in 2019, are included. Amounts earned during 2019, but paid or awarded in 2020 or a later year, are not included. The total includes amounts for team commissions, various types of bonuses, event-related compensation, Flex Points redemptions, and incentive travel awards. Amounts of Instant Income and volume rebates are not included in Box 7, as these are considered purchase-price discounts, which reduce the cost of acquired products, rather than income. The values used for Flex Points redemptions and incentive travel awards match the amounts shown on the demonstrator Miscellaneous Income report.

Form 1099 Box 9 – Payer Made Direct Sales of Consumer Products to a Buyer

The small box inside Box 9 is checked for demonstrator businesses that paid for customer and workshop orders during 2019, totaling $5,000.00 or more, net of Instant Income discounts and volume rebates. A Form 1099 is required to be issued if this box needs to be checked. This is the case even if no nonemployee compensation is reported in Box 7 because it is less than $600.00.


CANADA FORM T4A INFORMATION


Note: Canada Form T4 is required to be mailed no later than March 2, 2020.

January 8, 2020

Stampin’ Up! does not provide tax advice and recommends that demonstrators contact a knowledgeable advisor with any questions they may have in this regard. However, the company is providing the following information as a help to understand what is being reported on Form T4A.

Form T4A is required to be issued to each demonstrator whose business is run as a sole proprietorship (taxed as an individual) or organized as a partnership or corporation. The form is only prepared when the combined total of all amounts reported is $500.00 or more.

More information about income taxes and demonstrator businesses can be found in the Income Tax section of the Demonstrator Handbook.

Form T4A Box 020 – Self-employed Commissions

The amount shown in Box 020 reports a combination of cash paid and some non-cash values given to demonstrators during the 2019 calendar year. Amounts earned during 2018, but paid or given in 2019, are included. Amounts earned during 2019, but paid or given in 2020 or a later year, are not included. The total includes amounts for team commissions, various types of bonuses, event-related compensation, and travel vouchers. Amounts of Instant Income and volume rebates are not included in Box 020 as these are considered purchase-price discounts, which reduce the cost of acquired products, rather than income.

Form T4A Box 154 – Cash Awards or Prizes

The amount shown in Box 154 reports a combination of cash and non-cash awards or prizes given to demonstrators during the 2019 calendar year. Amounts earned during 2018, but paid or given in 2019, are included. Amounts earned during 2019, but paid or given in 2020 or a later year, are not included. The total includes the value of incentive travel and Flex Points redemptions. The values for these items match the amounts shown on the demonstrator Miscellaneous Income report.




Blythe Klipple
Updates Coordinator
blythek@mac.com



Blythe Klipple, UPDATES/FAQ COORDINATOR