Need advice...1099

[aquiestoy]

What is the name of your state?FL I need some advice...I borrowed money from an aquaintance who offered help in the financial bind I was in. She let me have 6,000.00 and I offered to work in her business to pay it off and she agreed. Eventually she was letting me work to pay off the debt and also earn some extra cash on the side. The checks were from here business account. Well this went on since February of 2004 until now...I recieved a 1099-MISC from her. It was for double what I had borrowed. She added not only what I borrowed ( and have paid back some by labor ) but also actual earnings. Should I have to pay taxes on monies that are going back to her repayment of the original loan? I dont doubt that I owe taxes, SS, etc. on some of it, but not all. Someone please - HELP. My urgency is because this extra money will put me owing money back to IRS.

 

[LdiJ]

What is the name of your state?FL I need some advice...I borrowed money from an aquaintance who offered help in the financial bind I was in. She let me have 6,000.00 and I offered to work in her business to pay it off and she agreed. Eventually she was letting me work to pay off the debt and also earn some extra cash on the side. The checks were from here business account. Well this went on since February of 2004 until now...I recieved a 1099-MISC from her. It was for double what I had borrowed. She added not only what I borrowed ( and have paid back some by labor ) but also actual earnings. Should I have to pay taxes on monies that are going back to her repayment of the original loan? I dont doubt that I owe taxes, SS, etc. on some of it, but not all. Someone please - HELP. My urgency is because this extra money will put me owing money back to IRS.

That is tricky from a tax standpoint. Normally a loan and a repayment of a loan has no tax consequences. However, if your loan could have catagorized as an "advance" towards services rendered, then it would be appropriate for her to give you a 1099 for the entire amount.