Hello shoppers. Perhaps someone can help me. I did a search on the forum for this topic but didn't find anything. I nevr have luck with that. Also, I know QAMS sent out emails on this subject but I can't find mine.
Anyway, they sent out a 1099 for amounts way less than $600. How do we report this? I would prefer to lump it together with all my other earnings. But since it is an official 1099 what do you think? Also, I don't think I agree with the amount they reported because I bet the check was in the mail.
if you want to report a different amount you can provide an explanation...
there is option to do it if you are filing online yourself or if you use an accountant
they will put it in for you.
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There are no stupid questions, but there are a lot of inquisitive idiots
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Just lump it in with the rest. The IRS doesn't need to see a breakdown by 1099 on your tax return. As long as the total income your report on the Gross Receipts line is equal to or greater than the 1099s it got for your SSN they won't need to know the details.
You should have been planning to report that income whether you got a 1099 or not. Employers are required to issue a 1099 if they pay you more than $600. They are allowed to issue one for any amount even if they don't have to. You are required to report all income even if you don't get one.
One thing that can bite people unexpectedly is if they don't get a 1099 so they leave off that company's income and file their return without it. Then the company files the 1099s after the deadline. I had that happen to a client once. She thought she was "working under the table" (i.e., colluding with the employer for both of them to cheat on their taxes) and wouldn't get a 1099 so didn't bother telling me about the money she made working as a receptionist for a small company. then the company did their own tax return and found out they couldn't deduct what they paid her unless they 1099d her. so she got a 1099 a year after she should have and had to pay the taxes on it and penalties for not reporting it when she made it. It was over $20,000. I think the tax bill with the penalties and interest added was about $10,000 if I remember right.
We are all required to pay taxes on our income regardless of whether it was reported or not. I had another client who never got a W-2. We had to request the W-2, then when it didn't come, we had to report to the IRS that we requested the W-2, and when the IRS's contact didn't shake them loose of one, we had to estimate what the earnings and withholding should have been and fill out one ourselves and report that. No idea what happened to the company (who went out of business) but my client was legal and clear on the matter. If he hadn't reported it and three years later the company finally issued all those back W-2s my client would have been the one in trouble for tax evasion.
Out of curiosity, since you and the client could only estimate the income and withholding, what would happen if the company did finally issue that W-2 and the estimates were off? Would your client's attempt be considered good faith and absolve them of any penalties?
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They sent out 1099's to everyone, no matter what the income. I just looked closer at the matter and the 1099 they sent me is incorrect even per their online records. (and their online records match my records - only $48. The 1099 is $96 which is wait for it .... 48 x 2!!!!)
I was planning on recording this $48 as I do all income in the lump sum portion of the schedule c easy or whatever it's called.
if you decide to enter 48--PRINT OUT THE RECORDS THAT SHOW IT IS THE CORRECT AMOUNT..if you are audited you will need to prove it.
from what i remember..the actual form that goes to the IRS only lists one lump sum of 1099 and other income....but if you use software it has you enter the info individuallly on a work sheet for your records..and adds it up for you.
the only time its okay to not report self employment or other non work income is if its less than a specified amount in TOTAL ..i think it is $400.
so if you made 399 with 1 company an 2 with another (after deductions i think)...you are over the limit and need to report.