2017 Mailbag #1: The 1099 Doesn’t Show Up, So I Don’t Have to Report It, Right?

It’s time for this year’s mailbag, and we’ll start with a common question: What happens if you’re expecting a 1099 and it doesn’t show up? There’s a twist as you will soon see:

I did contract work for a company and they should issue me a 1099. However, the company closed its doors; the company closed its doors last March (the owner retired) and the owner passed away a month later. If (when) I don’t receive the 1099, do I still have to report the income?

Yes, you need to report the income. All income is taxable unless Congress exempts it. Yes, the company you did work for is supposed to issue you a Form 1099-MISC. But whether or not you receive a 1099 doesn’t change whether income is taxable or not. You were paid for services, and that’s income. Simply total what you received and include it in your gross receipts for your business.

Sure, the executor of the owner’s estate is supposed to take care of all responsibilities. That includes the final tax returns and any information returns that must be filed. Interestingly, one of my clients just received a 1099 for 2014. The situation appears similar to my correspondent’s. It turns out the owner passed away and the estate was handled through probate. It took two years for the final tax return and the associated information returns to be prepared. It’s a non-issue for my client; he included the income on his 2014 tax return.

Remember, simply report all of your income regardless of whether or not you receive a 1099 (or other paperwork). It’s easier to sleep at night when your tax return is accurate.


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