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f13.net  |  f13.net General Forums  |  General Discussion  |  Topic: Taxes 0 Members and 1 Guest are viewing this topic.
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Abagadro
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on: February 22, 2021, 08:24:25 PM

I know we had one of these threads at some point, but I can't find it.  I'm hoping one of our resident CPA's can give me some guidance here.

My wife has a side-gig as a freelance writer and the company she writes for sent her a 1099-MISC with independent contractor payments in Box 7.  This doesn't exist any more in 2020 as that should be in Box 1 of the new 1099-NEC form.  They basically filed a form with the IRS that is no longer valid.

I had my wife contact the company, which wrapped up its existence and doesn't operate any more (it was a joint venture between two newspapers, both of which still exist though so the people are still there, it just got absorbed into one of the papers). The "payroll administrator" basically blew off the question saying that since it was the last year of operation they "didn't want to update the software" and that the 1099-MISC should "provide enough information to file taxes." 

I want to respond back with a professional version of "bitch, the problem is you used the wrong form which is illegal and is going to fuck me up with the IRS since I will have a mismatched form" but my wife is giving me static. Just had a huge fight about it.

It all ends up on the same line in the Schedule C so the taxes owed/paid will be the same, but I think its bullshit if I have to deal with some hassle because they don't want to comply with tax law.  I just know the IRS computer will spit out the discrepancy.  There is literally no place in the worksheets to enter the income they included in the 1099-MISC. I would have to put it in the proper 1099-NEC line but it then won't line up.

Any suggestions?


"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.

-H.L. Mencken
Johny Cee
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Reply #1 on: February 23, 2021, 09:39:40 AM

I know we had one of these threads at some point, but I can't find it.  I'm hoping one of our resident CPA's can give me some guidance here.

My wife has a side-gig as a freelance writer and the company she writes for sent her a 1099-MISC with independent contractor payments in Box 7.  This doesn't exist any more in 2020 as that should be in Box 1 of the new 1099-NEC form.  They basically filed a form with the IRS that is no longer valid.

I had my wife contact the company, which wrapped up its existence and doesn't operate any more (it was a joint venture between two newspapers, both of which still exist though so the people are still there, it just got absorbed into one of the papers). The "payroll administrator" basically blew off the question saying that since it was the last year of operation they "didn't want to update the software" and that the 1099-MISC should "provide enough information to file taxes." 

I want to respond back with a professional version of "bitch, the problem is you used the wrong form which is illegal and is going to fuck me up with the IRS since I will have a mismatched form" but my wife is giving me static. Just had a huge fight about it.

It all ends up on the same line in the Schedule C so the taxes owed/paid will be the same, but I think its bullshit if I have to deal with some hassle because they don't want to comply with tax law.  I just know the IRS computer will spit out the discrepancy.  There is literally no place in the worksheets to enter the income they included in the 1099-MISC. I would have to put it in the proper 1099-NEC line but it then won't line up.

Any suggestions?

I think you're being too worried.

Yes, everyone should be using the 1099NEC for non-employee compensation (compensation subject to self-employment tax).  Forms have come out slowly, the IRS is overwhelmed and software has been a giant pain in the ass.   My office got a giant pile of 1099NECs that, despite being advertised to work with our software of choice, did not and went in the garbage.  L



Go see an accountant.  It definitely isn't a major problem, but its worth marital harmony and reduced worry to pay the $200-$400 to have a professional handle it.  If you get a notice, the accountant can handle it. 

Just get a quote before and make sure any follow up on the issue is covered in the quote.


Johny Cee
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Posts: 3404


Reply #2 on: February 23, 2021, 04:40:23 PM

Since you didn't respond, here's the answer you want to hear (working on the assumption that if you were satisfied with the previous you would have said something):


When you do her Schedule C, put the 1099Misc income in as revenue.  Don't put it in as 1099NEC.  Just regular revenue.  The IRS only seemed to give a shit if the total of all 1099Miscs/Ks/etc they received was greater than your total claimed revenue.  I've had plenty of clients who used to lose or misplace their 1099s, but we didn't care particularly too much as we were going off of actual receipts/actual deposits.

Fuck, a good portion of the 1099Misc/NEC's have very obvious errors...  going to old EINs, incorrect legal names/addresses, incorrect totals, etc.


The 1099NEC filing requirement is between her old employer and the IRS.  At worst its a $50 penalty per occurrence, but with the joint venture winding down and you not saying the size of the venture its a "I'm sorry please abate" letter from whomever is winding down the old entity.  The IRS is waaaay behind on everything from COVID, they probably aren't going to care. 

If we were talking about a 1099R error (which you asked about some years ago, yes?) then shit yeah you yell at your Plan Administrator to fix their goddamn form as that is the primary source document for your tax liability.  Same for 1099B/Div/Int or Schedule K-1s. 

Anecdotally, 1099Misc/NEC seem to be more supplementary information.  The IRS uses these numbers to verify your reported numbers but doesn't rely on them to the same degree.


Again, the easiest thing to do is actually get a Real Accountant.....  considering their fee is going to probably be less than the cost of the make-up dinner and monetary value of the stress from arguing with your spouse.  If you were to get a real accountant, you could just drop off any notice and they would handle it.
Abagadro
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Reply #3 on: February 23, 2021, 11:23:42 PM

Heh, I've been at work all day (back in the office as of yesterday).  Sorry I didn't jump right on it.  Thanks for your thoughts.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.

-H.L. Mencken
Johny Cee
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Posts: 3404


Reply #4 on: February 24, 2021, 12:51:24 AM

Heh, I've been at work all day (back in the office as of yesterday).  Sorry I didn't jump right on it.  Thanks for your thoughts.

Ahhh, alright then.  Might be my projection of "What happens when I don't hear the answer I want to hear."   Oh ho ho ho. Reallllly?
Abagadro
Terracotta Army
Posts: 12109

Possibly the only user with more posts in the Den than PC/Console Gaming.


Reply #5 on: February 24, 2021, 01:07:33 AM

We smoothed over our tiff right away, so it was down to just getting some practical advice at this point.  I appreciate you taking the time/effort.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.

-H.L. Mencken
Johny Cee
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Posts: 3404


Reply #6 on: February 24, 2021, 04:00:55 PM

Sorry, tax time stressed out right now.


I am fucking ready to stop having to juggle tax deadlines on top of various SBA/COVID/CARES Act assistance.  Motherfucking PPP round 2 ends on 3/31, at which point I'm sure I will be dealing with people who haven't received stimulus payment part 3.
Abagadro
Terracotta Army
Posts: 12109

Possibly the only user with more posts in the Den than PC/Console Gaming.


Reply #7 on: February 24, 2021, 04:30:58 PM

I'm sure it's a nightmare.  Most of my last year has been dealing with CARES and other federal funding on the local government spending/ procurement side of things and it is a mess even from that angle.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.

-H.L. Mencken
Sky
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I love my TV an' hug my TV an' call it 'George'.


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Reply #8 on: February 25, 2021, 09:24:46 AM

Sorry, tax time stressed out right now.


I am fucking ready to stop having to juggle tax deadlines on top of various SBA/COVID/CARES Act assistance.  Motherfucking PPP round 2 ends on 3/31, at which point I'm sure I will be dealing with people who haven't received stimulus payment part 3.
PPP is a complete shitshow in NYS. I've been an outlet for my director's rants on the topic and it's pure  swamp poop

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