It is typical of some stores to run 1099 for merchandise they sell
on consignment. Really, they are in a way saying that you are
working for them, which of course you aren't. I had a couple of
companies do this to me in the past. It can make it harder I think
for you to do your taxes because it looks more like gross income
when it is actually gross receipts.
I have never worried one way or the other about receiving a 1099
from someone, since I do in fact carefully record and pay income
taxes on everything I make, so whatever income the gallery reports to
the IRS is included in my tax form already. I don’t go to any extra
trouble to even check up on the numbers, which have always seemed to
be in the ballpark, other than to glance at them, or perhaps to see
if my sales there are up or down from last year.
I have other income from other sources…wholesale, retail…and for
IRS purposes, it is all the same. For state sales tax purposes, some
of it is different, but not for the IRS. It would be good to take a
look at any 1099 you get just to make sure that they did not make a
big error and add an extra digit, or something like that which could
throw your reported income way out of whack from the truth. If my
income were ONLY from consignment, I would check these forms to the
penny, so my numbers would for sure be exact with what the IRS thinks
I am getting, as reported to them on the 1099’s.
– M’lou Brubaker, Jeweler
northern Minnesota, U.S.A.