topic Re: Double Taxation in Self employed

Double Taxation

Guanyin Chinese Medicine Clinic — Wed, 02 Apr 2025 22:17:01 GMT

One insurance company, UnitedHealthCare, always sends out credit payments to us. That means we have to mannually enter the card number and the amount of payment in the credit card app, Square. When it comes to file the tax return, UnitedHealth sends us the 1099-Misc and the Square also sends us a 1099-K. The amount of payments on 1099-Musc (from UnitedHealth) is also reported on 1099-K (from Square). That means the icome is reported twice and we are double taxed. How can we fix this to avoid DOUBLE Taxation? Thanks for the help!

Re: Double Taxation

MaryK4 — Wed, 02 Apr 2025 22:24:52 GMT

You can omit the duplicate entry. It is not necessary to enter the double reported payments.

Re: Double Taxation

Guanyin Chinese Medicine Clinic — Wed, 02 Apr 2025 22:39:21 GMT

I am not sure how to omit the duplicate because they are not duplicate reports. For example, UnitedHealth reported $1,000.00 on 1099-Misc and Square reported $3,000.00 on 1099-K. That $3,000.00 included UH's $1,000.00 and other individual payment ($2,000.00). Can I forget about the 1099-Misc because it is included inthe 1099-K? Or report the 1099K as $2,000.00 rather than $3,000.00? I bet if I do either, IRS will send me a letter and ask for an explanation.

Re: Double Taxation

MaryK4 — Wed, 02 Apr 2025 22:46:02 GMT

If the income is reported on the 1099-K it is easier to omit the 1099-MISC. As long as you keep the records and report the correct income, you will not have an issue. In general, the IRS has a pretty good system in place and they just rather recently started the 1099-Ks, especially with the low filing threshold so you may get contacted- but you are not required to pay tax on income you did not receive even if someone reports it. Once again, the best things is to keep books and records that show income and not rely on the 1099s. @Guanyin Chinese Medicine Clinic

Re: Double Taxation

Guanyin Chinese Medicine Clinic — Wed, 02 Apr 2025 22:49:34 GMT

Great! I will do as advised. Thanks for the help!