Independent contractor/ agent taking payments or your behalf

DW78 — Sun, 21 Sep 2025 06:39:15 GMT

I have a traveling business where I sell merchandise at street festivals, county fairs, similar events. I have many agents working at different events at the same time or day. How do I set up so the sales they are making do not go against them directly for tax reasons? As they are agents and receive a % of their gross sales. I made an error originally and now they are receiving 1099 from sales made on my behalf.

Re: Independent contractor/ agent taking payments or your behalf

Donnie-M — Wed, 01 Feb 2023 14:23:19 GMT

@DW78 I am not sure they shouldn't receive a 1099. Even as an agent they would be considered an independent contractor. You will have the gross revenue, but the % of sales is a commission. Even if you want to pay the income tax on that money, you would still be legally responsible to report to the IRS the money you pay them. If they each set up their own square account, they would be paying you and would still have to declare the income they keep.

I don't see a way to legally do this without incurring some kind of risk.

"You must file if you pay more than $600 during the tax year to a service provider during the course of your company's income-generating business activities. This requirement also applies to nonprofit organizations, even if they're granted tax-exempt status under Internal Revenue Code Section 501(c) or (d). Trusts of qualified employer pension plans, fixed investment trusts, farmers' cooperatives and government agencies must also use 1099-MISC forms to report payments for services."

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Independent contractor/ agent taking payments or your behalf

Re: Independent contractor/ agent taking payments or your behalf