If you received an erroneous 1099-Misc
You have several choices:
1. Ideally, you get a corrected
1099-misc from the payer
2. Don't report it on your
return. Attach a copy of the 1099 and a statement explaining the circumstances.
You can't e-file. From
the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form
is incorrect or has been issued in error, contact the payer. If you cannot get
this form corrected, attach an explanation to your tax return and report your
income correctly.
3. Report the Income on
schedule C and take a deduction, for the same amount, under other expenses
4. Report the income as misc line 21
income (enter in TurboTax at the
1099-Misc screen) . Then enter a
line 21 deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other
reportable income - Enter the number with a minus sign (-) in front. Briefly
explain at description.
5. Do nothing and hope you can
explain it away when & if the IRS contacts you
