Self employed income seems to have listed twice last year

[jroocello]

Hello, my wife and I teach music lessons privately, and freelance performances too.  It appears that for 2020 taxes, I listed our income teaching, but then possibly also wrote it down in another category, making it appear we made double our actual income.  We owed about the same as previous years so I didn't catch the mistake until now.  I suppose my question is:  Can I just not list our income like that this year for 2021?  Do I need to write the IRS to try and correct this?  Am I DEFINITELY getting audited no matter what I do??   Thanks!

lost, hopeless, confused musician : )

[Vanessa A]

No, you cannot just not list your income you received in 2021 to make up for a double entry in 2020.  You would need to  Amend Your Return  for 2020 to remove that income.  Amending your return would be similar to writing the IRS, but you are filling out a form 1040X, to tell them you made a mistake in 2020 and want to correct it.  

Amending your return or making a mistake does not automatically trigger an audit.  So, no, you are not definitely getting audited no matter what you do.  Although there is no guarantee, chances are you will not be audited for duplicating your income.  

[VolvoGirl]

Where do you see it twice on your 2020 return?   Is your Schedule C income on line 1 too much?  Or is it also on the 1040 as other income?

You both teach?  You should have separate Schedule C for each of you splitting the income & expenses.   

[jroocello]

Thank you very much for your quick response!  schedule C listed for each of us, then freelance, performances, and teaching listed as a third thing just for me, which includes all the money together.  Its like I took a break in the middle of doing taxes, then came back and another section asked about business income and I wrote it down there also.  I don't really want to change 2020 returns, but will it get me into trouble to NOT list that imaginary business income this year?  Shall I just ignore 2020 tax return and focus on 2021?  Thanks again!

[AnnetteB6]

It would be to your benefit to amend your 2020 tax return to correct the income you reported, but since you reported too much income instead of too little, it is very unlikely that this would cause any issues with the IRS.  Additionally, amending your return to correct your income will also update the records with Social Security because the self-employment tax amount will change as your income is reduced to the correct amount.

For 2021, if you and your wife are in a similar situation with your income streams, just be sure that you are reporting the income only one time on whichever Schedule C makes sense.  You should definitely have at least two Schedule Cs as part of your return; one for your teaching and one for your wife's teaching. 

You can still include the third Schedule C for your freelance and performances as long as you only enter the income and expenses from those activities and do not include your teaching income and expenses.  

@jroocello