I and a friend work independently in my home office. Her business is separate from mine and I charge her a small percentage of her receipts for use of my office space.

[mikecn10ec]

Usually, she pays me the percentage by check.  But in 2016, several of her clients made their checks out to my name instead of hers.  I deposited those checks in my account and issued her a check for her client fees, less the percentage for use of my office space.  Does that make her my employee in the eyes of IRS?  Thanks.

[Fern · Accepted solution]

If the net amount that you paid her is more than $600, you should issue a 1099 misc. The form should be issued as soon as possible. There are penalties assessed for filing a 1099 misc late. See https://www.irs.gov/government-entities/federal-state-local-governments/increase-in-information-retu... .

You can complete 1099 forms using Quick Employer Forms. Go to https://quickemployerforms.intuit.com/welcome.htm

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