Getting recipts for farm purchases.

[plowjockey]

When you buy hay, livestock, etc., from another individual, what is the best way to get a recipt for tax purposes, take won't make an accountant or IRS agent roll their eyes?

If the seller doesn't know you well, they don't want a check and they now usually don't even want a check, to endorse, give back and get cash, which worked in the old days. You could run the endorsed check through your bank, get the cash back and have the transaction documented, on your farm account.

We have done hand written recipts and had the seller sign, but that looks pretty cheezy.

Just looking for a better, more organized way, to keep us and the IRS happy.

[Alice In TX/MO]

Cheezy is just fine.

[DaleK]

I still get a hand-written receipt from my custom combine operator every year that seems to keep our revenuers happy. Last year it was for almost $60,000.

If it bothers you I suppose you could just get a blank receipt book from an office supply place and have them fill one out, give them the copy.

[oneokie]

Any type of hand written reciept will work. If the transaction is for more than $600, you need their SS# for 1099 tax forms.

[Txrider]

Originally Posted by plowjockey

When you buy hay, livestock, etc., from another individual, what is the best way to get a recipt for tax purposes, take won't make an accountant or IRS agent roll their eyes?

If the seller doesn't know you well, they don't want a check and they now usually don't even want a check, to endorse, give back and get cash, which worked in the old days. You could run the endorsed check through your bank, get the cash back and have the transaction documented, on your farm account.

We have done hand written recipts and had the seller sign, but that looks pretty cheezy.

Just looking for a better, more organized way, to keep us and the IRS happy.

Nothing at all wrong with cheezy.... The IRS can't do anything about it.

You could get a little receipt pad online, and have the person use it when you purchase instead of hand written if it bothers you.

http://www.officemax.com/office-supp...oduct-ARS20353

[Common Tator]

I have had the sellers write out a bill of sale for me.

[KIT.S]

Actually, when you're purchasing a product, rather than labor, you don't need to get information for preparing a Form 1099. The Form 1099 is for labor only for someone you've paid $600 or more in the course of your business. If they don't break down labor and materials, you can make the 1099 out for the total amount, and they can deduct the materials on their income tax forms.
And yes, we see plenty of hand-written receipts, hopefully with enough information that the IRS could, if auditing, check with the seller. IRS wouldn't, unless the purchase was very large, but they like to see that they could.
Kit

[colourfastt]

Originally Posted by KIT.S

Actually, when you're purchasing a product, rather than labor, you don't need to get information for preparing a Form 1099. The Form 1099 is for labor only for someone you've paid $600 or more in the course of your business. If they don't break down labor and materials, you can make the 1099 out for the total amount, and they can deduct the materials on their income tax forms.
And yes, we see plenty of hand-written receipts, hopefully with enough information that the IRS could, if auditing, check with the seller. IRS wouldn't, unless the purchase was very large, but they like to see that they could.
Kit

Actually the tax law changed this year; as of Jan 1 you'll need to 1099 anyone with whom you spend more than $600 in services, labour, OR products.

[foxtrapper]

Cheesy is fine. But you can always pick up a generic blank receipt book from an office supply store and carry it in your vehicle. Then do up a receipt when you want one.

[happycat]

Originally Posted by colourfastt

Actually the tax law changed this year; as of Jan 1 you'll need to 1099 anyone with whom you spend more than $600 in services, labour, OR products.

What is your source for this? The IRS 1099 instructions for 2010 state that payments for merchandise are still an exception. If that is no longer the case, business will be 1099-ing every one of their vendors. That's crazy!

[happycat]

OK, I only see this new information cited in news sources, nothing from the IRS yet. And, it doesn't go into effect until 2012. It's still crazy - an administrative nightmare.

Oh, and on the issue of handwritten receipts - be aware that if sales tax is not split out on the receipt, and you cannot prove that you actually paid sales tax, your state could require you to pay "use tax" on the item with your Department of Revenue return. Those are the terms the state of WA uses, your state could be different.

[oneokie]

Originally Posted by happycat

What is your source for this? The IRS 1099 instructions for 2010 state that payments for merchandise are still an exception. If that is no longer the case, business will be 1099-ing every one of their vendors. That's crazy!

The law for 1099's has always been that if the payment was made to an established business (brick and mortar), a 1099 was not required. Or that is what my CPA has explained to me.

[Explorer]

The tax law change was part of the universal medical bill just passed by CONgress.

[Bearfootfarm]

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

http://money.cnn.com/2010/05/05/smal...re_tax_change/