I received a check dated Jan 2, 2018. I intended for this to be 2018 income, but the payer has sent me a 2017 1099. Can I still wait and claim on 2018 return? How?

Forum|Forum|7 years ago
June 6, 2019
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maglib

Level 11

you should speak to the business who sent the 1099. If the check was not written and dated in 2018, they should not have issued you a 1099 for 2017, they should be reporting it in 2018, the year paid. They need to correct it.

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Silver13Author

Level 2

I already called them and argued that since the check was not cut until 2018, the1099 should not be issued until the end of 2018. They said that they processed the transaction on December 29, 2017 so that's when they reported it. I argued that just because they entered a process doesn't make it a payment. It's not a payment until the check is cut. The check was not cut until 2018 and, therefore, was not income received by me in 2017. I had no access to the money until 2018. They refuse to correct it.

maglib

Level 11

What happens if the issuer won’t cooperate? They can be subject to fines at the IRS. The money was not made available to you till 2018 and the check was dated 2018. This is an error that they need to fix. If not they are potentially subject to fines and even lawsuits. https://www.irs.gov/government-entities/federal-state-local-governments/increase-in-information-return-penalties-2 Do note that you should save all documentation related to your conversations of their refusal and whom you spoke with.
You can call the IRS at 800-829-1040 and explain your situation. The IRS will contact the company that issued the 1099 and request a corrected form. Do note this will take time and you still need to get your return done.

If they refuse to fix it you still can address it by filing an information statement. You will add the 1099 in as reported and then you will be able to adjust the amount and have to provide an information statement to the IRS with your return.
For example, you could show the $x payment on your return (on line 21, or on a Schedule C), and then explain the $x overstatement. Report the Income on schedule C and take a deduction under other expenses, for the incorrect amount, call it something like "1099 issued in wrong year".

You could do so in a statement or footnote by showing $x on line 21, but adding “see statement.”  The statement might say:

Erroneous Form 1099-MISC    $x
Less error amount                        $x  *Amount was not paid nor issued till 2018 and will be properly reflected on my 2018 return. Issuer refuses to correct.
Net to line 21                                 $

Sadly this will also cause you to have to file by mail.  If you file schedule C, you could put under other expense.

Silver13Author

Level 2

Well, that was fun. I just called the IRS for help on how to handle this. She wasn't understanding of the situation. When I told her I had received a 1099R for the wrong year, she told me to just make it simple on myself and claim it for 2017. I tried to explain that the check wasn't written until January 2018 and, therefore, wasn't constructively received income until 2018. She just kept telling me that since the money had been reported to the IRS for 2017, they would be looking for it on my return for 2017 and I should just claim it. She then basically cut me off with a "Thank you for calling the IRS. Goodbye"

This is 2018 income and I need to report it as such. So, please tell me how I do this... I have input the 1099R income on line 15. Now how/where do I reverse the dollar amount and indicate that I intend to claim this on my 2018 return because that's the year the payment was issued to me? You said I'd have to file by mail, which is fine by me, but will I still be able to input everything on Turbo Tax? THANK YOU FOR YOUR HELP!