What do I claim on my income taxes if I pay people for referring clients or finders fees?

Question by msent916: What do I claim on my income taxes if I pay people for referring clients or finders fees?
I have a business and at times I give people a percentage for referring clients or finders fees from deals that I make. What do I claim on my income taxes if I pay people for referring clients or finders fees?

Best answer:

Answer by bostonianinmo
Show it as outside commissions paid. If you pay anyone $ 600 or more, you MUST prepare a Form 1099-MISC and give them a copy. The 1099 is optional if you pay them less than $ 600 in any tax year.

TIP: Before paying ANYONE, give them a Form W-9. Require them to complete and return it BEFORE you pay them anything. Failing to get and report their TIN will cost you penalties from the IRS.

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