Yes, which means you're going to have a problem with the IRS when your tax return doesn't natch the copy of the 1099-misc they get.
If you received an erroneous 1099-Misc
You have several choices:
1. Ideally, you get a corrected 1099-misc from the payer
2. Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
3. If the income is in box 7 of the 1099-Misc, Report the Income on schedule C and take a deduction under other expenses, call it something like "duplicate amount reported on W-2"
4. If the income is in box 3 of the 1099-Misc, report the income as misc line 21 income (enter in TurboTax at the 1099-Misc screen) . Then enter a line 21 deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Enter the number with a minus sign (-) in front. Briefly explain at description.
