Filing 1099-Schedule C and 1120S For The First Time

[KC1267]

Hello - There are several parts to this question

1. I worked as a Schedule C 1099 employee  from 2/24-8/24.  I  incorporated my business on 8/24, however, there was a delay in getting my EIN #.  Due to this I couldn't open a Business Bank Account until 10/24.  The individual who issued me the 1099 stated they needed to include payments from 8/24-10/24 on the 1099 because they paid me directly vs paying my business even though the business was opened per FL State as of 8/24.   Is this correct?  

2. When filing my taxes (I'm trying to do them on my own as I always have) do I need to do a 1040 for the 1099 income and a separate for the 1120S for the Business or would they be combined? If combined, is there another form to use other than the two mentioned?

Thank you, 

[DianeW777]

Yes, they had a filing requirement and only had your social security number (SSN) for the payments. In this circumstance they had to issue the 1099-NEC in your name and number. You can use the nominee procedure below to transfer the 1099 income to the s-corporation. You can also decide to transfer all of the income to the s-corporation.  You can complete the 1120-S with a K-1 that flows to your personal return. 

You can choose to include all income earned after August 24, 2024, on the 1120-S return if you consider all of the income related to the s-corporation even though you received the EIN late. The amount earned before you filed for the s-corporation would be reported on your tax return as self employment (Schedule C). 

Keep in mind the s-corporation is now a different entity then yourself and certain rules must be followed for distributions to yourself.

Distributions must be made proportionally according to each shareholder's ownership stake in the company. You may have to  use W-2 if you pay yourself outside of your contributions.

Nominee Returns.  This is how the IRS knows what you are doing.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: 

• Form 1096
• Form 1099-NEC