Today TaxMama hears from Brian in Connecticut, who says. “I did some work for a guy in 2007. He paid me with business checks totaling $6,100.00 with no deductions. He refuses to give me a 1099. What should I do?”
What should you do?
Prepare your tax return – and get on with your life. You don’t need the 1099.
Don’t you know the purpose of the Form 1099-MISC?
It’s not for you. It was designed as a tattletale – to let IRS know how much you were paid, and to pressure you into reporting the correct amount of income.
It’s not a replacement for doing your own bookkeeping. Just because some clients or customers pay you less than $600 per year doesn’t meant you don’t have to report the income from them.
All your income is taxable. And it’s up to you to keep the books.
Myth #2. IRS audits aren’t about your expenses. They’re about ensuring you’ve reported all your income. The expense verification is just gravy, giving IRS a few sure-fire expenses they know they can disallow.
So, Brian, it’s time to start treating your business like YOUR business – not as an extension of your client’s businesses.
And remember, you can find answers to all kinds of questions about tax myths and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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