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US Tax Questions: Proz membership, Paypal fees, and No 1099
Thread poster: Caroline Moreno
Caroline Moreno  Identity Verified
United States
Local time: 19:58
Chinese to English
+ ...
Jan 25, 2008

Hello there,

So, I'm thinking about upgrading to a platinum membership to Proz for 3 years. If I do the 3-year memberhip, do I spread out that deduction over 3 years or just take it all in the year I purchase the membership? Also, are Paypal fees for receiving payments generally deductible? Lastly, I have several clients who may not be sending me 1099s (one is in Europe). How do I deal with this? Thanks in advance for your advice on my myriad questions!

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Yvette Neisser Moreno  Identity Verified
United States
Local time: 22:58
Spanish to English
+ ...
report all income Jan 25, 2008

Hi Caroline (my fellow Moreno). I can only address your last question. It doesn't matter whether your clients send you 1099s--you have to report all income earned. I checked this with the IRS last year.

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Paul Merriam  Identity Verified
Local time: 22:58
Member (2008)
Russian to English
+ ...
Check with your accountant Jan 25, 2008

Your first question: You are permitted to expense multi-year expenses over multiple years. However, I don't think you are required to do so. And I believe you have to be consistent. (If you do it for Proz membership, I'm fairly sure you have to do it for ATA membership, for example).

Paypal fees should be deductible. They are, after all, incurred in the production of income.

For the third one, the IRS is very clear. You must report all income, whether or not accompanied by a 1099 or a W-2. So if you have a client who pays you $65 to translate something, no follow-on work, such a client doesn't give you a 1099, but you still have to declare the $65 as income. You should also check any 1099s you get for accuracy. If your client inadvertantly leaves out a decimal point and reports to the IRS that they paid you 100 times the amount they actually paid you, that should be straightened out.

Given the potential penalties involved, I strongly recommend referring questions of this nature to an accountant. I think not hiring an accountant would be penny-wise and pound-foolish.

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US Tax Questions: Proz membership, Paypal fees, and No 1099

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