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New Member
posted May 31, 2019 10:21:52 PM

Customer made a retail purchase on our website and then sent us a 1099 misc for nonemployee compensation. How do I correct this?

This was a retail purchase and we should not have received a 1099-Misc from a customer. Our company already receives a 1099-K from the payment processor for gross income so the payment on this 1099 results in a duplicate reporting. What can I do to correct this?

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1 Best answer
Expert Alumni
May 31, 2019 10:21:54 PM

If they won't correct the 1099-MISC, this is not a big problem. Its bothersome to get the 1099-MISC, but ultimately shouldn't cause you any problems.

Your actual tax return only shows your income (Schedule C, line 1). It does not distinguish between 1099 forms or no 1099 forms.

As far as the IRS "matching" your gross income against the 1099 forms, this is not likely to be a problem when you have a 1099-K. 1099-K forms alert the IRS that you have self-employment income, but the dollar amounts are not lined up against Schedule C, line 1 the way 1099MISC forms are. 1099-K dollar amounts are often not the correct "gross" sales amounts, so the matching against income is not precise.

Its unlikely that the IRS' computers will see your Schedule C gross income as inadequate.

  • The smartest choice is to ignore the 1099-MISC. If you report all of your gross income, you have done nothing wrong
  • If you cannot get them to correct the 1099-MISC, and it really bothers you, you could report the 1099MISC as income and then back out the number as an expense. This is not the smartest choice, as you are then showing your gross income as greater than it is.

4 Replies
Expert Alumni
May 31, 2019 10:21:54 PM

If they won't correct the 1099-MISC, this is not a big problem. Its bothersome to get the 1099-MISC, but ultimately shouldn't cause you any problems.

Your actual tax return only shows your income (Schedule C, line 1). It does not distinguish between 1099 forms or no 1099 forms.

As far as the IRS "matching" your gross income against the 1099 forms, this is not likely to be a problem when you have a 1099-K. 1099-K forms alert the IRS that you have self-employment income, but the dollar amounts are not lined up against Schedule C, line 1 the way 1099MISC forms are. 1099-K dollar amounts are often not the correct "gross" sales amounts, so the matching against income is not precise.

Its unlikely that the IRS' computers will see your Schedule C gross income as inadequate.

  • The smartest choice is to ignore the 1099-MISC. If you report all of your gross income, you have done nothing wrong
  • If you cannot get them to correct the 1099-MISC, and it really bothers you, you could report the 1099MISC as income and then back out the number as an expense. This is not the smartest choice, as you are then showing your gross income as greater than it is.

Expert Alumni
May 31, 2019 10:21:55 PM

I would enter the 1099MISC just so its in your computerized return file, then back out the number from what you reported under General Income (1099-K)

New Member
May 31, 2019 10:21:56 PM

Since our total income is reported on the 1099-K wouldn't it be a red flag if I choose to just ignore the 1099-Misc?  This is so aggravating.

Expert Alumni
May 31, 2019 10:21:59 PM

No, the IRS does not match income "dollar for dollar" with 1099Ks. Your gross income will already be adequate. The IRS doesn't care about the input of 1099 forms for Schedule C- it only cares about the gross income on line 1 of the Sch C.