We received royalties right at the end of 2018 for about $250 for which they paid us by check (minus all their ridiculous ownership deductions so we really only got $140). They sent us the 1099-Misc a few months later and we filed it with our 2018 taxes. We owed money so we did not receive any state or federal refunds. The company then decided to stop payment on the check, so we were never actually paid by them. They said they will be issuing us a new check now and a corrected 1099.
If the corrected 1099 for last year has a value of zero and we already filed and paid taxes on the $250 amount they listed on the original 1099 we filed, I am thinking we do not have to file an amended 2018 return? It would not make the amount of taxes we owed any higher and it wouldn't decrease the amount we owed by much either.
This has never happened before so I am a bit confused and want to make sure we do not have to file an amended 2018 return if someone sends us a corrected 1099-Misc that is for less than the one we already filed. Thank you!
It would not make the amount of taxes we owed any higher and it wouldn't decrease the amount we owed by much either.
If you know that for a fact (based upon having entered the new figure in place of the original figure from your 1099), then you really do not have much of an issue; you do not need to amend if doing so will result in a decrease in your tax liability.
Thank you for responding. As a precaution, I did test this and removed the previous incorrect amount from the original 1099 in Turbotax and it decreased our Fed/state taxes owed by $30 and $11. We will just eat that money rather than file an amended return and I guess we will pay taxes (again LOL) for it on our 2019 taxes once they send a new check out this month. At least they are going to repay us the bank fees we were charged.