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Level 1

I received a 1099 with my ss#. The income was direct deposit to my llc bank account. The income was reported on llc 1065. How do I report this on my personal taxes?

I was instructed to put the income on schedule C and then put it in again as a negative number with a note “ paid to llc”.  The IRS reversed the negative and sent me notice I need to pay taxes the total ( which is 2 times the amount). How do I correct the Schedule C?

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Level 20

I received a 1099 with my ss#. The income was direct deposit to my llc bank account. The income was reported on llc 1065. How do I report this on my personal taxes?

At this point you don't correct anything.  Respond to the IRS letter by explaining what you did and why you did it.  Include copies of any accounting paperwork, worksheets, PNL statements, and your 1065 tax return, to prove that you already reported the income.  Keep copies, use a mailing service with tracking, and be sure to mail it before any deadlines in your current letter.  If the IRS accepts your explanation, they will correct your file and you don't need to send in an amended return also, unless they tell you to.

The actual IRS instructions for when you receive a 1099-MISC in error are to not enter it on your tax return at all.  Write a letter of explanation, and attach the letter and a copy of the 1099 to your tax return, and file your return by mail.  (This is a one page explanation, you would only send additional proof if asked.  In your present case you need to send full proof.). The "report the 1099 then report a negative item" trick was created to allow you to e-file--I know it is used on this board a lot, but I don't know who created or endorsed it (a volunteer or a Turbotax Pro).  But I have seen enough complaints to know that it does not always work the way people think it will, and the better method is to file by mail with an explanation.  

3 Replies
Level 20

I received a 1099 with my ss#. The income was direct deposit to my llc bank account. The income was reported on llc 1065. How do I report this on my personal taxes?

At this point you don't correct anything.  Respond to the IRS letter by explaining what you did and why you did it.  Include copies of any accounting paperwork, worksheets, PNL statements, and your 1065 tax return, to prove that you already reported the income.  Keep copies, use a mailing service with tracking, and be sure to mail it before any deadlines in your current letter.  If the IRS accepts your explanation, they will correct your file and you don't need to send in an amended return also, unless they tell you to.

The actual IRS instructions for when you receive a 1099-MISC in error are to not enter it on your tax return at all.  Write a letter of explanation, and attach the letter and a copy of the 1099 to your tax return, and file your return by mail.  (This is a one page explanation, you would only send additional proof if asked.  In your present case you need to send full proof.). The "report the 1099 then report a negative item" trick was created to allow you to e-file--I know it is used on this board a lot, but I don't know who created or endorsed it (a volunteer or a Turbotax Pro).  But I have seen enough complaints to know that it does not always work the way people think it will, and the better method is to file by mail with an explanation.  

Level 11

I received a 1099 with my ss#. The income was direct deposit to my llc bank account. The income was reported on llc 1065. How do I report this on my personal taxes?

And take action that this doesn't happen again ...require the issurer to correct the form next time.

And I have used the Sch C cure many times without issue ...send supporting docs in your response.
Level 17 rjs
Level 17

I received a 1099 with my ss#. The income was direct deposit to my llc bank account. The income was reported on llc 1065. How do I report this on my personal taxes?

How did the payer get your Social Security number? You must have given them a Form W-9 with your Social Security number instead of the EIN of the multi-member LLC. Give them a new W-9 with the name and EIN of the LLC, and tell them to use it for all future payments and 1099s.