After filing my client's 1040 for 2018 & 2019, when I was getting ready to prepare their C corporation return, I find out that my client was issued 1099's to her social security and to her old Sole Prop EIN in addition to her C Corp EIN for both 2018 and 2019. What to do? Can I report all income on her C Corp return? Do I have to go back and amend both 2018 and 2019 to reflect the SS and Sole Prop 1099 income? It will be a nightmare to try to match expenses to those specific 1099's?
Thank you in advance for the input!
If the income is reported on the corporate return, there should not be any issues. You can explain to the IRS, if they ask, that the income was reported on the correct tax return. Just keep good records. If the income is reported on the corporate return, it should not also be on her personal return even if they did make a mistake with the 1099s.
You are not allowed to use TurboTax as a professional software, which sounds like what you are doing since you reference your client.
Actually no, that's not what I'm doing. I posted my question on the wrong message board. Since then, I posted in the intuit Proconnect.
Thank you!
No problem. We will close this one. The income has to go to the correct year and correct tax return. You may need to get corrected 1099 forms but you do not have to report the income twice.
Thanks, Dawn. I received several comments on the other forum that conflict with each other:((
All the income was suppose to go to the C Corp, but the people preparing the 1099's made them out to my client's SS and another person made it out to her old Sole Prop EIN when they shouldn't have issued 1099's in the first place as C Corp's don't need 1099's issued to them:(
If the income is reported on the corporate return, there should not be any issues. You can explain to the IRS, if they ask, that the income was reported on the correct tax return. Just keep good records. If the income is reported on the corporate return, it should not also be on her personal return even if they did make a mistake with the 1099s.