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Tax Law (Questions About Taxes)/Payments for course materials


For the past few years, my husband has been an LLC member in the business of of providing instruction for a continuing studies certificate program at a university.  My husband developed the materials (Powerpoint presentations regularly updated) for 2 of the courses.  The other members developed materials for the other courses.  

Last fall the university decided that it wanted to use the services of individuals, not a company and the LLC was terminated.  So, my husband still teaches courses but now as an employee.  Occasionally, the other ex LLC Members use my husband's materials and pay for them.  Sometimes my husband uses the materials of the others and pays them.  Since they are now employees, it looks like paying for materials would be an unreimbursed employee expense, only deductible if it exceeds 2% of AGI?  How would the person receiving the payments report them?  Should 1099-Misc forms be created and which box should be used to report them?  For 2012 my husband only received one payment of $336 and made no payments to others.  This year he will need to pay for some materials and will receive more payments.

Thanks for any suggestions.


Thanks for your question.

You are correct on the paying for materials, it is a Miscellaneous itemized deduction as you stated.

As an individual, he does not need to issue any 1099's. He can show the income as other income on line 21 or he can use Schedule C and treat it like a business if it is ongoing and not just occasional.

If he is operating a business, he should issue 1099's to anyone he pays $600 or more during the year unless the payment is to an established business.  Place the amount in box 7.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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