by darrinerbert2 » Thu May 01, 2008 04:35 pm
What if your deductible is 500. You have hail damage and the insurance adjuster estimates the damages at 4000, which means they will pay 3500 to get it fixed. Now lets say you found a body shop that will fix it for 3500. Do you still have to pay the deductible even though the insurance company already declared they would pay 3500 towards the repairs from the insurance adjusters evaluation?
Posted: Tue May 06, 2008 03:15 pm Post Subject:
Net Profit or not... it's still reported to the IRS.
Posted: Tue May 06, 2008 03:32 pm Post Subject:
It's still income, it just might not be profit.
You would be amazed at the number of small (*micro* in the eyes of the IRS) business's that have gone bankrupt thinking that way.
They see those Gross Sales and get the itch to spend. Not realizing that only about eight cents on the dollar is theirs to spend.
FK,
Posted: Tue May 06, 2008 05:27 pm Post Subject:
[quote:36ad175f14="FK"]You would be amazed at the number of small (*micro* in the eyes of the IRS) business's that have gone bankrupt thinking that way.
They see those Gross Sales and get the itch to spend. Not realizing that only about eight cents on the dollar is theirs to spend.[/quote:36ad175f14]
Uhhh...ok. I'm sure there are businessmen out there that have no business running a business...heh...business. But that still doesn't change the fact that money coming in equals income. Income minus expenditures equals profit. I've never been an accoutant, tax professional, or business owner, so I'm not sure how taxes are assessed on those three factors (income, expenditures, and profit), but I am positive that payment from an insurance company for services rendered would count as income, not pure profit.
Posted: Tue May 06, 2008 11:03 pm Post Subject:
It also creates a lot of mis-information. There are many, many people out there that will forge the body shops name and cash the check with-out giving it a second thought.
So now what, the IRS thinks some body shop just received a $10,000.oo *Income*, when they did not..!
FK,
Posted: Wed May 07, 2008 10:28 am Post Subject:
It also creates a lot of mis-information. There are many, many people out there that will forge the body shops name and cash the check with-out giving it a second thought.
You're right there are slimmy people out there that do that...that's why a shop had better keep good records...all of it is gross sales Fred....when you do your taxes you deduct the expenditures from the gross sales...so if the 1099 was for 3k for a particular job, you had 1k in cost in parts and 1500 in cost in labor then you have 500 that you are paying taxes on....So now what, the IRS thinks some body shop just received a $10,000.oo *Income*, when they did not..!
We've had this discussion before I don't make the rules, I just know that anytime a shop is paid for services rendered their tax id number must also be entered (talk to the irs...this isn't an ins. company thing)...and thus generates a w2 or 1099 whichever.
Posted: Wed May 07, 2008 01:04 pm Post Subject:
We've had this discussion before I don't make the rules, I just know that anytime a shop is paid for services rendered their tax id number must also be entered (talk to the irs...this isn't an ins. company thing)...and thus generates a w2 or 1099 whichever.
Yes I believe this topic has been discussed before, just like Many, Many topics on this bulletin board and thousands of others around the world. The nice thing about that is discovering & sharing new information & thoughts each time.
I understand your point, but the system is very inconsistent.
First, I don't believe any consumer insurance policy is written with a Body Shop's name included on the Declaration page(s). Its the insured's policy and the insurance money is being paid to them. Not the body shop.
Second, the Mis-Information mentioned earlier.
Third, Why isn't the Tax Id needed to report the *income* (and 1099) when the check is made with only the name of the consumer and their Finance company?
Forth, I'm only stating and asking because these inconsistencies have the potential to create unjust and financially devastating problems for Body Shops.
FK
Posted: Thu May 08, 2008 12:16 pm Post Subject:
Yes I believe this topic has been discussed before, just like Many, Many topics on this bulletin board and thousands of others around the world. The nice thing about that is discovering & sharing new information & thoughts each time.
Sorry Fred, I didn't mean that in a snotty way, however after re-reading it (my comment) I could see it might've come off that way...not my intent if that's how you took it... :)
I understand your point, but the system is very inconsistent.
I'm with you friend, and honestly causes me a pain in the well you know, because I have to look up the number or request it if I don't have it, and then enter the dag-gum thing...much easier for me if this were not ''required'' by our dear IRS...bless their sweet hearts...First, I don't believe any consumer insurance policy is written with a Body Shop's name included on the Declaration page(s). Its the insured's policy and the insurance money is being paid to them. Not the body shop
You of course are correct...trouble comes up though with leinholders, and owners not repairing and instead pocketing the money, then the car is re-popped and the leinholder comes to the carrier and says, 'hey they had ins. with you when this happened...kindly fix the car'' then ins carrier says, 'hey, we already did''' leinholder says, 'well genius you didn't protect our interest by either including us on the draft or a shop, so guess what? Pay it again''.....and yes, I have seen this happen a handful of times...of course the carrier then subro's their own insured for the second payment, but rarely gets the money back...after all these people got their car re-popped they hardly worry about repaying an ins. company..
Third, Why isn't the Tax Id needed to report the *income* (and 1099) when the check is made with only the name of the consumer and their Finance company?
Because their are no services rendered then....it is simply applied to the loan....why does this bother you Fred? (I promise I'm not trying to be argumentative, I really don't see the rub). All of my income is reported to the IRS....and I have to pay taxes (ultimately) on my ''adjusted'' gross so why wouldn't everyone? If it's paid on a homeowners claim to a roofer, same thing applies....the potential to create unjust and financially devastating problems for Body Shops.
How so Fred? Are body shops you know not claiming the payments made to them by self pay jobs? Why wouldn't they report that income as well...I was in buisness for myself for several years...I claimed all the money that came in the shop...then at the end of the year when I filed my taxes then all the deductions came in (parts, ulitlities, anything we could take), then after all these deductions if there was anything left then that is what we owed taxes on....same with body shop...how else is the dear IRS going to make sure they collect thier due? You can't just say tell one industry that they don 't have to report income...I really don't understand how you don't see this as the same as in every industry...???Posted: Thu May 08, 2008 03:13 pm Post Subject:
Lori,
Because their are no services rendered then
There an no services rendered by a body shop at the time a check is sent to the insured either....
==============
...it is simply applied to the loan....
What is applied to the Loan??
==============
Why does it bother me, you ask,
Well because I'm sure that in the last nearly forty years likely hundreds of un-scrupulous people have received insurance checks with my business name and their name on them, endorsed them and cashed them. Leaving the IRS thinking I signed those checks and may not have reported the income.!
I PAY ALL OF MY TAXES EVERY YEAR. ON TIME AND IN FULL. [not just the IRS,... all of them]
One more thought.... If a homeowner had a minor damage claim and only had to replace $10,000.oo worth of furniture.....
Would you put the Furniture stores name on the Check??
If there was an cost increase of $300.oo.
Would the homeowner have to submit a copy of the Furniture Stores purchase invoice before you would pay the additional amount??
FK
Posted: Fri May 09, 2008 11:48 am Post Subject:
There an no services rendered by a body shop at the time a check is sent to the insured either....
No but there will be...and if they change their mind (insured) then the draft can be stopped and reissued to the correct shop or lein holder....or as my company is now doing issuing payment AFTER the repair is completed rather than on the front side...maybe all companies will eventually go to that, I know many are...What is applied to the Loan??
The car loan/note Fred...the lein on the car...
Well because I'm sure that in the last nearly forty years likely hundreds of un-scrupulous people have received insurance checks with my business name and their name on them, endorsed them and cashed them. Leaving the IRS thinking I signed those checks and may not have reported the income.!
That would tick me off too, but first off this has only been going on about ten years and not even that in some companies, and secondly you would've received a w2 or 1099 on that job so you would know if someone was forging your signature, and be able to prosecute...I actually did assist a shop with this ONCE in the last ten years...we were able to retrieve the back of the draft showing they signed it, the shop's attorney sent a letter, and those people paid up in a hurry let me tell you...otherwise they would've (and IMO still should've) faced criminal charges..I PAY ALL OF MY TAXES EVERY YEAR. ON TIME AND IN FULL.
No need toyell Fred, I never ensinuated you didn't did I?One more thought.... If a homeowner had a minor damage claim and only had to replace $10,000.oo worth of furniture.....
No, but again no services have been rendered, rather they have purchased replacement furnature, and would certainly (more than likely) be paying sales tax at the time of sale, and the furnature store pays his taxes based on sales right?Would you put the Furniture stores name on the Check??
If there was an cost increase of $300.oo.
Actually yes, kind of....most h/o claims now are settled with 3/4 paid upfront then the homeowner has to produce invoices proving that whatever was repaired/replaced then the insurance company pays the balance....Would the homeowner have to submit a copy of the Furniture Stores purchase invoice before you would pay the additional amount
AGAIN Fred, I (nor carriers) don't make the rules here....In this particular topic the IRS does....
Posted: Mon Oct 13, 2008 06:46 pm Post Subject: response
yes sir you would still have to pay your ded. you are under contract with your insurance company where u are required to pay your ded. before your insurance carrier issues any payment...if u find someone to repair your veh for 3500, you would pay 500 and your ins co would pay 3000
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