@Soharu wrote:
When I say partner, I mean girlfriend. We aren't in an actual business partnership. I am not trying to hide her income, the income is being reported under her when it's actually my income as the stream is mine. We just put the wrong SSN & Name when we filled it out.
I want to pay the taxes under my name in the rightful & just process
I'm still slightly concerned by "helps me manage it." If all the important business activities are yours and the other person does not "materially participate", then it can be your business alone.
You report the business income and expenses on schedule C. You are required to keep accurate records of your income and expenses and report them even if you don't get tax paperwork in your name.
For your girlfriend, there are 2 suggested procedures, both of which could result in a followup letter from the IRS asking for proof.
1. Your girlfriend lists the 1099s as income. Then, she creates an item of "other income" that is a negative number that cancels out the income. Add a reason like "1099 issued to wrong person" or something. Then she goes ahead and e-files.
2. Your girlfriend does not list the 1099s. She prints her return and files by mail, and includes copies of the 1099s and a letter of explanation that gives the important details: the payer was given the wrong number, the payer refused to issue a corrected 1099; the income should have been reported in your name; that you will be reporting then income on your return; and giving your name, address and SSN. She should not use the word "partner" in her letter, and she should not describe herself as "managing" your business; either of those comments could cause the IRS to misunderstand the same way I did.
Because she can't e-file with #2, many people choose method #1 for this situation. But #2 is recommended by the IRS. In either case, be prepared for a letter from the IRS asking for more details. You will want to save proof from the payer that they refused to issue a corrected 1099, as well as proof that you corrected it for the future, and proof that this is your business, not hers.
