Hi. This is my first post here so my apologies if this question has been asked before. I searched but didn't see it.
I do some freelance moonlighting during the year to the tune of around $5,000. In the past, the company has sent me a 1099 (usually the last one I get) and I pay my taxes on that additional earnings.
This year, no 1099. My question is: Do I need to claim that money if they never send me a 1099? And if they simply made a mistake or it just got lost, can they send it next year and make me responsible for it then?
This year, no 1099. My question is: Do I need to claim that money if they never send me a 1099?
Yes, add that to your other income reported even if not gotten the 1099, because you got the money. You need to find out why you didn't received your copy. You can contact them for a lost copy.
And if they simply made a mistake or it just got lost, can they send it next year and make me responsible for it then?
No, that would mean you're not complying with the laws this year, and if filed wrongly included in 2004, you would have underpaid 2003 and overpaid 2004.
Technically, say couple years down the road, this problem surfaces and you have to pay up, you would owe some interest and possibly some fines you could have avoided if correct now.
One of the best reasons you want to report it in 2003 rather than bunching the $5,000 with the 2004 is the possible additional tax you pay if that amount kicks you up to the next higher tax bracket, causing you to pay more than otherwise:
1. If single, from taxable income $7,000 at 10% to 15%, increase of 50% tax.
2. If married, from taxable income $14,000 at 10% to 15%, same 50% increase.
3. And on and on....from 15% to 25%, increase of 66% tax for that next $5,000.
Anyone tells you otherwise, don't know what they're talking about.
03-02-2004 04:43 PM
