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macattax
Level 1

Should I be adding a correction to the 1099 so that it supports my records if the amount on the 1099-MISC form is different than the actuals?

 
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Accepted Solutions
ToddL99
Expert Alumni

Should I be adding a correction to the 1099 so that it supports my records if the amount on the 1099-MISC form is different than the actuals?

Unless you can convince the payer to issue a corrected 1099-MISC, you should report the income on your 2020 return. You earned the income in 2020 and receiving payment a short time after Dec 31 does not change the economic fundamentals of the transaction.

 

As @JohnB5677 stated, "The 1099-MISC that you received has already gone to the IRS.  So, the IRS is expecting to get a tax return that matches it."  

  

What the payer did is extremely common -  make payment by check at the end of the year and claim the expense on the date the check is made out or mailed.

 

There is nothing wrong with doing that (unless the check is intentionally delayed for an unreasonable period of time). Realistically, you earned the income in 2020, received payment within a reasonable period of time (even after Dec 31), incurred deductible  expenses against that income in 2020 and claimed those expenses on your 2020 income.

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3 Replies
JohnB5677
Expert Alumni

Should I be adding a correction to the 1099 so that it supports my records if the amount on the 1099-MISC form is different than the actuals?

The 1099-MISC that you received has already gone to the IRS.  So, the IRS is expecting to get a tax return that matches it.  

 

Although the revenue you received does not match your record, their may be expenses that would bring it into line.  The 1099-MISC will include not only labor, but also materials and fees and perhaps other expenses.

 

Finally, if there is truly an error you can contact the person that issued the document and request a corrected copy.

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macattax
Level 1

Should I be adding a correction to the 1099 so that it supports my records if the amount on the 1099-MISC form is different than the actuals?

The variance in the totals is from payments made and received before and after the calendar year.

 

For example, the company on the 1099 cuts a check in the last week of the year and I receive it a week later. That amount is on their books for the previous year and it is on mine for the current year.

 

How should I deal with that discrepancy?

 

Thanks

ToddL99
Expert Alumni

Should I be adding a correction to the 1099 so that it supports my records if the amount on the 1099-MISC form is different than the actuals?

Unless you can convince the payer to issue a corrected 1099-MISC, you should report the income on your 2020 return. You earned the income in 2020 and receiving payment a short time after Dec 31 does not change the economic fundamentals of the transaction.

 

As @JohnB5677 stated, "The 1099-MISC that you received has already gone to the IRS.  So, the IRS is expecting to get a tax return that matches it."  

  

What the payer did is extremely common -  make payment by check at the end of the year and claim the expense on the date the check is made out or mailed.

 

There is nothing wrong with doing that (unless the check is intentionally delayed for an unreasonable period of time). Realistically, you earned the income in 2020, received payment within a reasonable period of time (even after Dec 31), incurred deductible  expenses against that income in 2020 and claimed those expenses on your 2020 income.

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