I am a sole proprietor - web designer, but I have a company name (DBA). This whole 1099 thing has me stumped this year. Normally I would always submit my income under General Income, and I have had a few companies sned me 1099s in the past, but they were companies I worked with regularly, so it was expected (since I signed a W-9 when I was first hired). But last year, I had a regular client who I just built a website for once, nothing on-going, send me a request for a W-9 and his accountant ensured me it wouldn't do anything to my tax return... Well, halfway through the summer, I got hit with a fine and had to pay taxes on money I already claimed because of that late 1099 that was sent in.
So I'm still unsure about how to enter income this year, because I heard that everyone who paid me over $600 last year is supposed to send me a 1099 now? That's a ton of clients, many of which I don't even remember. I tried contacting all of them and sent them my W-9, informing them that I was going to submit each as a separate 1099 (at the recommendation of Turbo Tax experts who told me I was screwed if they decided to send it out after I submitted.) I only heard back from a few of them, so I don't have their EIN numbers anyway, and can't submit that income separately.
So now I have to submit as General Income for most of them, what happens if they decide to send me 1099s a month from now? Do I end up getting fined for each one?
This is way too messy with the 1099 thing, because according to Turbo Tax, I cannot submit income as a 1099 unless they do... Turbo Tax was unclear of the consequences, and reluctant to provide any guidance on this one, so I have no idea how to handle this. Don't these clients have a responsibility and get fined if I claim a 1099 and they don't submit one? Or is it all on me to pay fines if something goes sideways? Aren't they required to send me a 1099 by a certain date? What happens to them, if they don't submit it by a certain date, or not at all? Do they get fined?
I'm asking because I'm having trouble getting through to some people, maybe they are uncomfortable sending me their SSNs or something (I know I would be too!) I mean, who ever heard of having to share your SSN with a stranger you hired for a few weeks last year? I don't even feel right asking them for it, but I have no idea how to convince them it's necessary. If I could warn them of the fines involved, that might help, but if they don't get fined, they have nothing to worry about (only I do.)
So you included the income and got the 1099Misc later? That should be ok. I would have fought it with the IRS. As long as you report as much or more income than you get 1099s for you should be ok. The 1099 Misc info you enter on your return does not get sent to the IRS. Just the total income gets sent. I don't know why you had a problem.
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