Tax season can feel like a juggling act, even more so when unexpected surprises show up in your mailbox. One common culprit? A Form 1099-NEC that reports more income than you actually received.
Sound familiar? You’re not alone.
At BASC Expertise, we regularly help clients deal with this frustrating situation. And while it can be stressful, there are ways to fix or at least offset, the problem and protect your bottom line.
Why This Happens
Picture this: You completed work in December, but the payment didn’t hit your account until January. Technically, that income belongs on this year’s tax return. But sometimes, a business sends you a 1099-NEC that reports it in last year’s income based on when they processed the payment, not when you received it.
The result? You’re suddenly taxed on money you didn’t have access to yet.
It’s a small error with big consequences. And unfortunately, once that 1099 is filed with the IRS, it’s not easy to erase.
What You Can Do
If you’ve received a 1099-NEC that overstates your income, don’t panic. Here’s how we recommend handling it:
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Reach Out for a Correction
Contact the business that issued the form and ask for a corrected 1099. We can help you draft a clear and professional request backed by IRS guidance. -
Report It, Then Adjust
If the payer won’t issue a correction, report the full income listed on the 1099 to stay in sync with IRS records. Then, use the “Other Expenses” section of your return to deduct the overstated amount, including a brief explanation. -
Keep Your Receipts (Literally)
Documentation is key. Save anything that shows when the money actually arrived—postmarked envelopes, bank statements, email confirmations. If the IRS comes asking, you’ll be ready.
You Deserve an Accurate Return
Receiving an incorrect 1099 can feel like a tax curveball but you don’t have to navigate it alone. At BASC Expertise, we’ll help you determine what income you actually earned, prepare the necessary documentation, and ensure your tax return is solid, accurate, and audit-ready.
If you’re unsure what to do with a 1099-NEC, reach out to us today. Let’s make sure you only pay what you truly owe and not a penny more.
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