Quick Question re: Federal Tax Filing

[Porsche-O-Phile]

My taxes have been done and ready to file for about a month and a half now except for one thing - I did some side work last year for which I'm supposed to be getting a 1099. This is not an insignificant amount of money and could greatly affect what I have to pay. I STILL (in mid-March and after repeated inquiries) have not gotten it (I keep getting the excuse of "it's on its way...") Questions:

1. Aren't we supposed to have these things by the end of January?

2. What happens if I just go ahead and say "screw it" and file with what I've got and the 1099 shows up two days later? Can I amend or what?

Just curious - haven't been in this situation before.

[red-beard]

Call the guy up. It takes maybe 5 minutes to fill a 1099 out, if you don't know what you're doing.

[daepp]

Claim the income regardless.

[krystar]

supposed to/legally bound to doesn't meant they will heh. especially small time contractors. i used to work for a company that wouldn't give me my 1099 till mid march. and the boss was a CPA himself.

u still have a month. and u can always amend afterwards.

[Porsche-O-Phile]

I have... I just keep getting the same old "oh yeah, it's on its way..." April 15 is coming and I doubt I'll have it by then... If not then what?

[Burnin' oil]

Claim the income, whether you get a 1099 or not. If you claim it later in an amended return, you will be penalized.

[cbush]

Can't you just file by entering the income? I don't send any of my 1099s in, I just enter the number off them--which should be exactly what you got in income.

Yes, you can always file an amended return, but that should not be necessary in this case.

[Porsche-O-Phile]

OK thanks. I was kind of thinking playing it safe by claiming it would be the wiser thing to do but wasn't sure if there was a penalty for not doing so... Thanks all.

As a related question, can't I offset the total amount with losses related to the work that was performed (expenses itemized on a P&L?) I really don't want this whole amount showing up as straight "income" if I can avoid it (and yes, a lot of it was spent on business-related costs of doing the associated work). If I end up having to pay on the full amount it's going to be ugly.

[RWebb]

be safe - attach a letter to the IRS and list the income; then pay the taxes on it - explain you may need to amend

be SURE to list ALL info on the recalcitrant person who is not giving you your 1099

BTW - there is a special form to file if you don't get a 1099, but I'd put the letter in as well.

you could also pay your taxes and request an extension

even safer, call the IRS help line - not the ID they give you in your letter and do whatever they tell you; state you are doing what ID # xxx said to do in the telephone call of date, time...

[red-beard]

Originally Posted by Porsche-O-Phile

OK thanks. I was kind of thinking playing it safe by claiming it would be the wiser thing to do but wasn't sure if there was a penalty for not doing so... Thanks all.

As a related question, can't I offset the total amount with losses related to the work that was performed (expenses itemized on a P&L?) I really don't want this whole amount showing up as straight "income" if I can avoid it (and yes, a lot of it was spent on business-related costs of doing the associated work). If I end up having to pay on the full amount it's going to be ugly.

Yes you can. I would consult a CPA to make sure the expenses are expenses, not depreciation, etc, and how to apply them.

[Porsche-O-Phile]

OK - it sounds like I'm getting into an area that's a little beyond what I can just plunk into Quicken or do via TaxACT... Up to now I've never really had enough to get into P&L statements and/or itemization and all that... On the upside 2010 was a pretty good year! Sure as hell beat 2009!

[Gogar]

+1 if you want to save yourself from doing an amended return when they FINALLY send it to you (which they definitely will, someday) just claim the income right now.

If you don't already fill out a schedule C for this 'sidework' business you might have to if you want to start claiming expenses, and you have to clearly separate your 'schedule C' expenses from your 'w-2 style' expenses if your work is similar. If you bought a fancy calculator and used it for both your straight job and your 'sidework' job, you have to decide where the deduction most benefits you, which is likely more beneficial on the Schedule C as a Section 179 deduction or just a regular deduction.

[red-beard]

I think you can plunk it into one of the good tax programs. My only concern is that some of the expenses might be things you cannot straight deduct against income.

For example, generally you can't deduct a computer purchased for a business. It is a depeciating asset. You deduct the amount of depreciation.

Last year, you could single year "depreciate" computer items. Again, the laws are a moving target and some of these things are subtle. We had to do some dancing this year as to how we recorded certain expenses (loans and interests) or we might have ended up paying taxes on the money. MOSTLY it was an issue of how we recorded the items in QuickBooks, which wasn't correct. Out CPA figured out the problems and helped us fix them.

[mikehinton]

The people who said to just report the income and file your return are 100% correct. I've been a CPA for over 30 years, and can tell you that I've never seen anyone have a problem by reporting income for which a 1099 was not received. The converse is not true.

Also, there is a widespread misconception about 1099s. They are not the same as W-2 forms and do not have to be attached to your income tax return. So, as long as you report the income, you're fine - don't worry about not receiving a 1099.

[RWebb]

Form 4852 subs. for no 1099-R if that helps