Hi everyone! I am a tax accountant who primarily serves freelancers and online business owners. I wanted to reach out to everyone and see if anyone had any tax or accounting related questions, feel free to reply here, direct message me, or email me at email@example.com and I’d love to help out in anyway I can!
Hey Michael, what an amazing offering! I have some general 1099 questions that some other freelancers have asked me about too. Do you have to wait to include 1099s in your taxes? If I kept detailed records of my income, can I just file without or do I need to wait for the 1099 to get information such as EIN and contact?
And then, what if other freelancers I work with don’t have EINs and don’t file 1099’s at all? How should I report that income? Does this change in regards to foreign income?
Thanks again for opening this channel up!
Hi Brandan, thanks for reaching out! These are some great questions, see my responses below:
Q1.Do you have to wait to include 1099-MISC received in your taxes before filing?
A1a: Only talking about 1099-MISC here with Box 7 checked for Non-Employee Compensation. If you keep good records and are sure that you have reported all income on your Sch. C or partnership tax return, you do not have to wait until you have received all 1099s prior to filing your taxes. However, if you receive any 1099-MISC that included any tax withheld, you will need to attached those to your tax return to provide the IRS support for your taxes paid. The primary issue you could run into is when the IRS receives the other copies of the 1099s issued to you and they have support for more income paid to you than the amount you reported non your tax return. If you already received a 1099-MISC prior to filing your tax return, its best practice to report them regardless of any tax withheld to avoid any issues & headaches down the road, should you ever get audited/examined by the IRS. The deadline to file Forms 1096/1099-MISC with box 7 Non-Employee Compensation and issue them to your vendors is January 31, 2018, so you should be receiving the majority of them from your customers/clients within the next week or so.
A1b: If you are referring to other Form 1099s, not 1099-MISC, such as ones you receive for investment income or retirement account distributions 1099-R/B/DIV/INT then yes, you need to wait till you receive these forms before filing your tax return or else it is likely you with receive an IRS Notice if any numbers don’t match exactly to what the IRS receives.
Q2: What if freelancers I work with that are suppose to issue me a 1099-MISC don’t send me one?
A2: Report all income on tax return regardless of whether or not you received a 1099-MISC from a customer or client to support it.
Q3: Does this change in regards to foreign income?
A3: Sometimes it does, sometimes it doesn’t. Foreign forms can be really tricky and they aren’t very many general answers to give regarding them. Every situation can be different so if you have any specific questions, shoot me an email at firstname.lastname@example.org and I’d be happy to help you out.
Thanks again for reaching out, I hope I was able to answer your questions. If you need any clarifications please let me know.
Helpful IRS Information Sources: