It depends on whether or not the company will issue a corrected 1099-Misc to your wife. If they will, then just wait for the corrected 1099s and file as you normally would. If the company does not correct the error, then below are a couple of options...
- You say that the 1099-Misc is addressed to your wife...does it have your wife's social security number printed in the box "Recipients Identification Number", or is the EIN of your wife's business printed there? If its the EIN of the business just include the income from the 1099s as you normally would with the business.
- If the number in the "Recipients Identification Number" is your wife's social security number then combine the amounts from the 1099-Misc forms on Line 1 of Schedule C of form 1040. Then, in Part V of Schedule C...put this exact description "Nominee Income to xx-xxxxxxx (which is your wife's EIN for her business)" then the amount of the 1099 out next to it. Part V is for "Other Expenses" so you do not have to enter the 1099s as negative numbers. Do this for each 1099 that has her social security number printed in the "Recipients Identification Number". This shows the income coming in and going right back out without any tax consequence. The effect of (2) is to show the IRS that your wife recognizes the income, but that it belongs to entirely different identification number, thus the phrase "nominee income to xx-xxxxxxx".
The income must still be added to your wife's business as it normally should, don't forget this...
See updated information below...
- Log into your tax return
- Click the Federal Taxes tab
- Click the Wages & Income tab
- Under the Less Common Income heading, click the Miscellaneous Income 1099-A, 1099-C start button
- On the next screen, under the Miscellaneous Income heading, click the Other Reportable Income start button
- Click the Yes button that you had Other Taxable Income
- Enter the following for the 1099 description..."S-Corp Income from xx-xxxxxxx (use payer's EIN)"
- Enter the amount of the 1099, and then click the Continue button
- Click the Add Another Income Item button
- see the 2nd screenshot below
- In the box for a 1099 description, enter the following "Nominee Income to xx-xxxxxxx (use your S-Corps EIN)"
- see the 3rd screenshot below
- Enter the amount of your 1099 as a NEGATIVE number
- Click the Continue button
This process will get the 1099-MISC onto your tax return, and it will show it backed out so you won't have to pay self-employment taxes on it. It will also keep you from having to upgrade to a different Turbo Tax.
Edited 2/13/2017 for additional info.
PMM
