How do I subtract income included in two separate 1099-Misc. One entity issued payment to my client. My client paid me. Both included amounts in 1099-Misc to me.

[KittyM · Accepted solution]

You will need to enter both of the 1099-MISC forms on your tax return, since copies of the forms will have been provided to the IRS.  After you have entered the 1099's, you will  be returned to the Here's your work info page.  Scroll down and click the button on the left titled Add income for this work.  Then take these steps:

• On the page Let's enter the income for your [Name] work, choose the second radio button Other self-employed income. Includes 1099-K, cash, and checks.
• On the next page Tell us about other self-employed income for your [Name] work, enter something along the lines of "Adjustment for income double-reported on 1099's" in the box labeled "Type of income" and enter the amount of money double-reported as a negative number.
• This will adjust your income to your actual earnings and resolve your issue.  If the IRS happens to write to you about this, you can explain to them what happened and provide proof, if they request it.