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Returning Member
posted Jan 23, 2021 10:39:58 AM

1099k earnings: how to record portion allocated to business partner as a deduction to my own income?

I shared a credit card terminal with another person and received a Form 1099-K with transactions belonging to that person in addition to my own payments. I created the 1099-misc forms with her portion of the payments, but I have not idea how or where to enter this information in my self-employment forms. How and where do I record my business partner's earnings as deductions to my own income? There doesn't seem to be an obvious place to do this.

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2 Replies
New Member
Mar 2, 2022 8:00:08 AM

I have a similar question - my friend and I have a small business together and we are 50/50 partners. We received a from 1099-K for 2021. However, it only includes my friend's name on the form. How can I include my portion of the income and expenses to my individual return. Can we just split the income mentioned on the 1099 by half and proceed? 

Expert Alumni
Mar 2, 2022 8:18:52 AM

You can record your share of the income on your self employment activity portion of your return.  The Form 1099-K is not an entry form for the tax return, in other words you take the number and enter that directly on the tax return.

 

Since this shows the full amount under one person's name then each person should report their share of the income on their individual tax returns. 

 

Options: (Option 2 is recommended)

  1. If you want to nominee the portion to the person whose name and social security number (SSN) do not appear on the form you can use the following information to do so.
  2. The person whose name and SSN are on the document can simply include the income, then as a Miscellaneous Expense and write the words 'Nominee Name XXX-XX-XXXX (SSN of the person who is claiming the other income.

Nominee returns. 

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

  • On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: