Incorrect 1099-NEC

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I was issued an incorrect 1099-NEC. I requested a correction. The payer refused to do so. I called IRS. They said to file it correctly but make a note of why the difference. How do I add a note to explain the difference?

TurboTax Self Employed Online

VolvoGirl

Level 15

What is wrong with the 1099NEC? Is it too much? You can add the difference as a Other Misc Expense with a description. Did they maybe include any reimbursements they paid you?

nnbb7Author

Level 2

They are reporting less than they actually paid me.

AliciaP1

Alumni - Intuit

You just need to correctly report your income from self-employment. If the 1099-NEC is less than the amount of income you report, the IRS will not flag your return or investigate. It is a natural assumption that you made additional income from another source that wasn't required to report it on a form.

You can see How do I report income from self-employment? and What self-employed expenses can I deduct? to be sure you are reporting the best situation for your business.

@nnbb7

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VolvoGirl

Level 15

Actually I would just enter your total income as Other self employment income or as Cash or General income. You don't need to get a 1099NEC or 1099Misc or 1099K. Even if you did you can enter all your income as Cash. Only the total goes to schedule C.

How to enter income from Self Employment

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

DianeW777

Alumni - Intuit

If you are self employed, and the vendor or company that you did work for reimbursed you for expenses, it's common to include those amounts in the 1099-NEC the provide. It's not a perfect system, however you can deduct your expenses that are included in the income.

You can go back to them and ask for a corrected 1099-NEC so that only the earnings above expense reimbursements are shown. For that company, either way, they will deduct the amounts paid for your expenses. Maybe explaining that to the accounting office will help. If they refuse, you can choose to report only the income earned and keep detailed records to prove your numbers.

Otherwise, you are correct that you will pay income tax and self employment tax on the amount of meals expense the IRS does not allow. In other words 50% of your meals will not be allowed to be deducted before tax.

@TheFunDad

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TheFunDad

Level 2

From my research under an accountable plan, they are not supposed to report this as Nonemployee income. Meaning I have provided the organization supporting documentation for all expenses incurred and they have not provided reimbursement until after reviewing documentation. To my knowledge, this being reported on Nonemployee income is actually an error. Is that correct?

DianeW777

Alumni - Intuit

You do understand the meaning of the 'accountable plan' rules. It should be considered an error. However the 'accountable plan' is set up for employers and employees which is why this gets confusing for those companies paying a self employed business/sole proprietor individual.

For this reason I provided the suggestion that will work for you which is to report only the income earned and keep detailed records to prove your numbers and receipts for reimbursements.

@TheFunDad

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