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Tax Law (Questions About Taxes)/how to handle incorrect 1099-MISC

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Question
I am a sole proprietor retailer. Included in my 2014 gross sales on Schedule C will be a $1000 merchandise sale to a company. In Feb I received a 1099-MISC from this buyer for $1000 as "non employee compensation" which as I understand it was unnecessary on their part.

The IRS will be expecting me to report this as some sort of additional contracting or freelance income when in fact it was a sale that is already reported. I am trying to get the company to send a corrected 1099-MISC with the amount changed to $0 but if they refuse to, how should I deal with this?

Answer
Theo,

Thanks for your question.

Don't worry about it. The $1000 is included in your reported sales.  Shouldn't cause an issue with the IRS. Normally, it would only be an issue if your reported sales was less than the amount of the 1099.

If you are using tax preparation software, just input the 1099, then reduce your other reported sales by the $1,000.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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