Level 5

Question

1099 vs Income reported

Forum|Forum|1 year ago
April 3, 2025
5 replies
14 views

TP'S income is less than 1099's received. TP is on cash basis. Should the 1099 income be reported to avoid problems in the future? All deposits on bank statements were reported as income. Some of the checks were received in January 25 but were dated in 24. It is an S-Corp now for 2024 taxes.

Thoughts?

Thanks in advance.

ProSeries Professional

This topic has been closed for replies.

IRonMaN

Level 15

Report what they actually received for the year.

Slava Ukraini!

Y

yeknodAuthor

Level 5

So, don't worry about the 1099''s being more than the income reported? Seems like that could be a red flag

TP is cash basis.

sjrcpa

Level 15

But if you and the client have good records to support what is on the return, then you have an explanation for IRS if the need arises.

One question, though - is this the type of business that might receive cash and not deposit it?

A number of years ago I had a self-employed plumber. He said - I guess I have to tell you about my cash jobs, too, don't I?

The more I know the more I don’t know.

BobKamman

Level 15

What ID number is on the 1099s? SSN or EIN? If the EIN, why are they issuing them (I know, there's no law against it and many payers will do that). If SSN, your real problem is IRS matching them to a non-existent Schedule C.

sjrcpa

Level 15

@BobKamman It could be 1099-Ks, too.

The more I know the more I don’t know.

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yeknodAuthor

Level 5

No 1099-K's only 1099-NEC

Just-Lisa-Now-

Intuit Community Champion

Why is an SCorp getting 1099s?

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yeknodAuthor

Level 5

They are an insurance company and they give 1099's to all entity types.

qbteachmt

Level 15

Bank deposit date for ACH/EFT is one thing. Those are timely. Bank deposit date when it came in the mail over Christmas and your taxpayer didn't go to the bank or do phone app deposits until back in the office in Jan, isn't cash basis 2025. That banking delay doesn't override that the money came in 2024.

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Winnie5911

Level 4

This could be because the received payment by credit card and charged an extra processing fee that the credit card kept and they didn't claim as revenue. They would then need to make an entry to reduce cash and charge credit card fees.

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