What do I do if I cannot get a contractor that I did sub-contract work for all of 2005 to issue me a form 1099? He says he don't have one and for me to look back at my deposits and figure it out, I can't do that because deposits sometimes included other things or were "less cash received" Need advice quickly, he is being a jerk about this
You will have to look at your deposit slips and try to figure it out. You might just ask him for a figure. You do not need the 1099 to report the income. Missy Doyle
It the amoun were over 600$ then he should have already issued a 1099-misc to you. HOWsomeever....... you are self employed, and it is always incumbent upon you to maintain suitable records of your income and expenses. As for those "mixed" deposits, can you imagine what fun IRS would have should they ever audit you? (I can) ChEAr$$$$, Harlan Lunsford, EA n LA
I worked in major CPA firm's tax department for over 20 years, and we dealt with this type of issue all the time. If there's no 1099, the IRS has no record of this income. Also, unless you have some other red flag on your return, there is very little chance you'll ever be audited. What I would do in this situation is a reasonable estimate of your income. Estimates are allowable on tax returns and used quite often with no bad result. Not only is this income amount too small for the IRS to do anything about (based on a cost/benefit analysis) but they know that if they spend all the time on an audit getting you to calculate the precise number, that you may end up getting a refund instead of having to pay more taxes. Just come up with a reasonable number, don't cheat yourself, and then sleep soundly knowing the IRS has much bigger fish to fry. (Think Leona Helmsley here.) EBT
As a business owner, it's up to you to maintain good books and records. You should know how much he paid you WITHOUT receiving a 1099 and you should report all of your income from your business activities whether or not you received documentation of such income (i.e., 1099's). If you cannot determine the amount of income you received during the year, how organized are you about properly recording your expenditures? How well prepared would you be if you had to provide documentation and support for any given item on your tax return?
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