How to Get a 1099-MISC Corrected
If you're working as an independent contractor, you'll probably receive several 1099-MISC forms from companies you work for throughout the year. In a perfect world, those who receive 1099 forms for nonemployee compensation should receive correct 1099s by January 31 of the filing year. Yet, we all know it's not a perfect world. As an independent contractor, what should you do if you received an incorrect 1099—or don't receive one at all?
If your 1099 doesn't arrive by February 1, give your client a few days before you follow up. This is a busy time of year for those handling 1099s, so yours may not be top-of-mind for them. After a few days though, be politely persistent—they are legally obligated to get you a correct form on time, after all. If there are mistakes to dispute, be sure you have all your records available before you call your client. And be sure you know the right department for handling 1099 issues.
Know If You Need Corrections
Review the information below to be sure that you do, in fact, need a corrected 1099-MISC:
Who should receive a 1099-MISC:
First, you should know when your client is required to send you 1099-MISC. If they paid you less than $600 during the tax year, they aren't required to issue a form. Also, be clear that your status fits the definition of an independent contractor. If you have worked for a company as an employee and not an independent contractor, you should have received a W-2 instead.
What period a 1099 covers:
Like a W-2, a 1099-MISC covers the tax year (January 1 to December 1) for which it was issued. When an employer reports your 1099 to the IRS, it will report any payments issued during that period. So, even if you received a check on January 1, go by the check issue date to ensure your tax reporting lines up with the client's. Pay close attention to payment issue dates around the turn of the year. This might clear up any mistakes easily.
Other situations affecting your 1099:
If the company issuing your 1099 was bought by another company during the tax year and you continued to work for the new owner, you could receive two 1099s for the year—one from the old owner and one from the new. If one of these 1099s is late or missing, this could explain what appears to be an incorrect amount of compensation on your 1099.
How to Get a Corrected 1099
Check the accuracy of any 1099-MISC forms you receive as soon as they arrive. You don't want to discover discrepancies on April 14. If you do find a disagreement between your records and the 1099, you should resolve this before filing. The issuer of a 1099 sends this form to the IRS, so any discrepancy can raise a red flag for an audit.
Immediately contact the person to whom you send your invoices if you believe your 1099 is incorrect. Ask them to send you a corrected 1099. Sometimes it's as simple as that, but often it will take multiple phone calls to different departments. You may need to provide copies of your invoices or work records to back up your dispute. Frankly, the issuer of a 1099 isn't nearly as motivated to sort out these errors as you are, so be prepared to be a little tenacious.
If Your Client Disputes Your Income Records
If you and your client can't agree on whose records are wrong, you can go ahead and report the income your records reflect, but you risk being audited. If you go that route, you'll need to provide the auditor with your documentation of your business income. If the IRS is convinced that your records are accurate, then it may audit the company that issued the 1099. However, there is a risk that the IRS won't side with you. You could also create ill will with your client, so it's best to straighten it out with them if at all possible.
When April 15 Is Looming
Let's say you waited to open your 1099-MISC until just before the filing deadline and discovered an error. File for an extension. You still have to pay your taxes by the due date, but this gives you and your client time to get the 1099 corrected.
I am not a tax attorney, CPA, or tax preparation specialist. For specific questions about your taxes, please refer to IRS publications or consult a tax specialist.