My wife is a freelance writer. She received a $2,000 advance payment in full from a payee/client, and the work was to be completed by June 2021.
Due to an upcoming move, my wife does not have the time to complete the work by June 2021 so it was mutually agreed that the wife would return the $2,000 to the client/payee, which she just did.
The client and wife agreed they would begin working on the project again later this year. The wife has worked for this person a lot over the past few years, so the returning of the $2,000 is mutual. The wife did not start the project yet either.
However, the wife just received the 1099-NEC from the client, and the 1099 includes the $2,000 payment in the total sum. The wife contacted the client and he said he cannot change the 1099; that it will just roll over to 2021 since they plan to continue working on the project again later this year.
The wife said she didn't see that being correct because what if the client or wife were to die, or something changes where the client no longer wants or needs the wife's services for this project.
I've been self-employed my entire life and when I receive an incorrect 1099, and the payee is non-responsive, I simply download form 1040X (?) and make the adjustments myself. I've received incorrect 1099's several times over my 30+ years being self-employed and I never ran into an issue doing this.
So... just looking for some current advise as I haven't had to request a 1099 correction in a long time.
Thank you!
Frank
