Importance of getting a 1099-NEC as an independent contractor

[StephA]

I am an independent contractor who earned $27,000 from one business client in 2023 via check and bank transfer. If they don’t give me a 1099-NEC, will that be an issue? Can I just report the income in TurboTax as “Other self-employed income, cash and checks”? Is there any benefit to me to trying to get  a 1099-NEC?

[Bsch4477 · Accepted solution]

It’s not an issue for you and you can report the income just as you posted. 

[StephA]

Great thank you. One follow up question - would it be an issue for the client if they didn’t issue a 1099-NEC? They are a sole proprietor. It’s within my interest to ensure they have no issues at tax time so I want to make sure they will not face any IRS compliance problems if they never issue a 1099-NEC. 

[KrisD15]

You are claiming the income. You don't enter the client's information so there is no red flag to the IRS about who didn't file a 1099.

Yes, the Sole-Proprietorship is responsible for filing 1099's and they should, but they didn't and they only have a few hours to go if they still want to issue them. 

The IRS will not be overly concerned since you are claiming and paying the tax due. If the client gets paid with 1099's and claims a large amount of subcontractor expenses, the IRS may want to see 1099-s from the client. 

[Bsch4477]

Yes, they should have issued you a 1099-NEC. 

https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-1099-nec/amp/L5fbwIFSn