1099-MISC Filed under the wrong SSN & Name

Forum|Forum|5 years ago
January 23, 2021
4 replies
33 views

I run a twitch stream and my girlfriend helps me manage it as she has streamed in the past on her own account.
All the payment & proceeds go to me & my PayPal account. When we filled out the tax information last year, we mistakenly put my partners SSN & Name for the twitch account. I Identified the error the other day and changed it to my information (MY SSN/NAME) but the 1099-MISC was already generated under her name the day prior.

This income can not be reported under her because it would mess with her unemployment and other benefits she has gotten this year.

I contacted twitch/amazon to issue a corrected 1099, and they say they are not able to. They don't have to report it to the IRS until late February and by law they are able to fix this problem by issuing a corrected 1099 but they are refusing

What is the our next step for this?

Should she just paper file her tax return, include a document explaining the issue, not file the 1099 and then I'll file it under myself instead?

Opus 17

Level 15

I am going to tell you what you must do legally. Although, I suspect you may not be interested in following these instructions if you are already trying to hide your partners income.

When you have a partnership with someone who is not your spouse, the partnership is required to report all of its income and expenses on a partnership tax return called a form 1065. When you prepare the form 1065 for the partnership, it will include a K-1 statement for each of the partners. Each partner includes the K-1 statement on their personal tax return. The K-1 statement shows each partner’s share of the partnership’s income and expenses, and are added to the partner‘s other income, deductions, and credits to create their final tax return. The partnership income is not necessarily divided 50-50, it depends on your agreement between the partners and how much work each partner does for the partnership.

The partnership return form 1065 can only be prepared with TurboTax Business, which is a separate program from the self-employment version, and is only available as a download or CD to install on a PC; there is no Mac or online version. The partnership return is due March 15, not April 15, and the penalty for late filing is $195 per month per partner.

SoharuAuthor

Level 2

When I say partner, I mean girlfriend. We aren't in an actual business partnership or domestic partnership. All the income/money gained from twitch streaming is my own and not hers. She just help me set the account up. I am not trying to hide her income, the income is being reported under her when it's actually my income as the stream is mine. We just put the wrong SSN & Name when we filled it out.

I want to pay the taxes under my name in the rightful & just process. Infact I have to pay more tax by putting them under my name since it will put me in a higher tax bracket. I am not trying to commit any tax fraud. We simply put the wrong SSN & Name in January last year on the form and didn't realize. It's a basic clerical error.

I believe this is a 1099-MISC Type 1 or 2 Error?

Opus 17

Level 15

@Soharu wrote:

When I say partner, I mean girlfriend. We aren't in an actual business partnership. I am not trying to hide her income, the income is being reported under her when it's actually my income as the stream is mine. We just put the wrong SSN & Name when we filled it out.

I want to pay the taxes under my name in the rightful & just process

I'm still slightly concerned by "helps me manage it." If all the important business activities are yours and the other person does not "materially participate", then it can be your business alone.

You report the business income and expenses on schedule C. You are required to keep accurate records of your income and expenses and report them even if you don't get tax paperwork in your name.

For your girlfriend, there are 2 suggested procedures, both of which could result in a followup letter from the IRS asking for proof.

1. Your girlfriend lists the 1099s as income. Then, she creates an item of "other income" that is a negative number that cancels out the income. Add a reason like "1099 issued to wrong person" or something. Then she goes ahead and e-files.

2. Your girlfriend does not list the 1099s. She prints her return and files by mail, and includes copies of the 1099s and a letter of explanation that gives the important details: the payer was given the wrong number, the payer refused to issue a corrected 1099; the income should have been reported in your name; that you will be reporting then income on your return; and giving your name, address and SSN. She should not use the word "partner" in her letter, and she should not describe herself as "managing" your business; either of those comments could cause the IRS to misunderstand the same way I did.

Because she can't e-file with #2, many people choose method #1 for this situation. But #2 is recommended by the IRS. In either case, be prepared for a letter from the IRS asking for more details. You will want to save proof from the payer that they refused to issue a corrected 1099, as well as proof that you corrected it for the future, and proof that this is your business, not hers.