Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
Overtorqued
New Member

1099 Misc non employee compensation misreported

I received 1099 Misc form and the amount shown is including income that I didn’t ‘earn’.  This was money that I was given to pick up his materials for jobs.  If I didn’t ‘earn’ this income, should it not be on there?  Do I need to have them redo with correct amounts?  I shouldn’t have to pay for money that I didn’t earn as income?

3 Replies
rjs
Level 15
Level 15

1099 Misc non employee compensation misreported

The 1099-MISC that you received is correct. It includes all the money that they paid to you. When you report your business income, you enter the amount that you paid for materials as a business expense. That reduces your net business income by the amount of the expenses. The effect on your tax is the same as if the amount was not included in the 1099-MISC. You will not be paying tax on the amount for materials.

tagteam
Level 15

1099 Misc non employee compensation misreported


@Overtorqued wrote:

I received 1099 Misc form and the amount shown is including income that I didn’t ‘earn’.  This was money that I was given to pick up his materials for jobs. 


If this were a true "gift", then you would not have earned (or taxable) income. What few facts are presented, however, indicate that you were given money in exchange for a service (picking up materials) and that militates against consideration of this transaction as a gift; it is taxable income to you. 

 

See https://www.irs.gov/forms-pubs/about-form-1099-misc

rjs
Level 15
Level 15

1099 Misc non employee compensation misreported

tagteam and I interpreted your question differently. I assumed that the extra money was for the cost of the materials that you picked up, and you paid that amount to the supplier of the materials. tagteam assumed that the extra money was additional compensation to you for picking up the materials. Either way, the 1099-MISC is correct. If tagteam's understanding was correct, then you did earn the extra money by performing the service of picking up the materials, and you do not have a business expense for the materials. In that case, you should be paying tax on the additional money.

Dynamic AdsDynamic Ads
Privacy Settings
v