Received 1099 with personal name instead of business name (S-Corp). How do I correct this?

Forum|Forum|6 years ago
June 1, 2019
2 replies
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We have received 1099s with the wrong name on them. They are made out to my wife but should be made out to her business. How do we correct this.

TurboTax Premier Online

PeterM

Employee

It depends on whether or not the company will issue a corrected 1099-Misc to your wife. If they will, then just wait for the corrected 1099s and file as you normally would. If the company does not correct the error, then below are a couple of options...

You say that the 1099-Misc is addressed to your wife...does it have your wife's social security number printed in the box "Recipients Identification Number", or is the EIN of your wife's business printed there? If its the EIN of the business just include the income from the 1099s as you normally would with the business.
If the number in the "Recipients Identification Number" is your wife's social security number then combine the amounts from the 1099-Misc forms on Line 1 of Schedule C of form 1040. Then, in Part V of Schedule C...put this exact description "Nominee Income to xx-xxxxxxx (which is your wife's EIN for her business)" then the amount of the 1099 out next to it. Part V is for "Other Expenses" so you do not have to enter the 1099s as negative numbers. Do this for each 1099 that has her social security number printed in the "Recipients Identification Number". This shows the income coming in and going right back out without any tax consequence. The effect of (2) is to show the IRS that your wife recognizes the income, but that it belongs to entirely different identification number, thus the phrase "nominee income to xx-xxxxxxx".

The income must still be added to your wife's business as it normally should, don't forget this...

See updated information below...

Log into your tax return
Click the Federal Taxes tab
Click the Wages & Income tab
Under the Less Common Income heading, click the Miscellaneous Income 1099-A, 1099-C start button
On the next screen, under the Miscellaneous Income heading, click the Other Reportable Income start button
Click the Yes button that you had Other Taxable Income
Enter the following for the 1099 description..."S-Corp Income from xx-xxxxxxx (use payer's EIN)"

see 1st screenshot below

Enter the amount of the 1099, and then click the Continue button
Click the Add Another Income Item button

see the 2nd screenshot below

In the box for a 1099 description, enter the following "Nominee Income to xx-xxxxxxx (use your S-Corps EIN)"

see the 3rd screenshot below

Enter the amount of your 1099 as a NEGATIVE number
Click the Continue button

This process will get the 1099-MISC onto your tax return, and it will show it backed out so you won't have to pay self-employment taxes on it. It will also keep you from having to upgrade to a different Turbo Tax.

Edited 2/13/2017 for additional info.
PMM

kent1Author

How do I have TurboTax make this change? As I work through he screens I have not found the opportunity to make this change to Schedule C.

kfuhster

I have the same question, but it's a 1099 NEC with personal name instead of S-corp name, and I'm using TurboTax Home & Business - how do I remit this to the company? I tried following the steps in the original (edited) post but the versions seem to be different that it's not clear if it's the correct way.

ThomasM125

@kfuhster I think you mean you performed services for a business as an S corporation but they issued you a form 1099-NEC reporting the income in your name, not the corporation name. If they entered the corporation federal ID number as opposed to your social security number on the form, you just report the income on the corporate tax return and nothing else is required.

If they reported the income under your social security number, the best thing would be if they would correct it. If not, you can enter the income as self-employment income on your personal tax return, then enter an expense for the same amount, called Commissions so the two will cancel each other out. Then, report the income on your corporation tax return.

You could also just not report the form 1099-NEC and if the IRS sends you a notice about it later on, just send them a letter explaining that you reported the income on your corporate tax return.

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kfuhster

Thanks, @ThomasM125. Yes, services were performed as a S-corp and the 1099-NEC was issued with SSN rather than the corp's federal ID. I have some follow-up questions.

Reporting the income on the corporation tax return, I just add the amount on the 1099-NEC to the ordinary business income (for this K-1 it shows up in both box 1 and 17) when reporting K-1? Everything else from the K-1 is reported as usual?

Reporting the income (and expense) on personal tax return - this is done in the "Business" section of Home & Business, correct? There's a section to report wages paid to other employees - this was already included when reporting the K-1, so do I just skip it here?