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Subject:  Re: 1099 income Date:  4/5/2011  12:21 AM
Author:  irasmilo Number:  112979 of 127637

My daughter worked in 2010 for several different employers. She got W2's from all except one and they were going to use a 1099 instead of W2.

The 1099 company paid her about $500 in 2010 and deferred her last pay check (approx $120) from December to Jan 2011. She also did some work in Jan 2011 and may do more work there later in 2011. They said that they did not have to issue a 1099 for 2010 since they paid her less than $600 and they'd put both the 2010 and 2011 income on the 1099 they'll issue for 2011.

She has to file for 2010 since she had W2 income from the other employers. Does she ignore the "1099" income earned in 2010 and show it next year on her 2011 tax return? Or does she have to report it as 2010 income even though the employer will not is putting it on her 1099 for 2011?

Hope that's clear! Thanks in advance.

She is required to report all of her 2010 income on her 2010 return regardless of whether the employer issues a 1099-MISC or not. A 1099 "employee" is actually a self-employed independent contractor. As such, she can deduct her reasonable and customary expenses from the amount she received before paying tax on the balance. See Schedule C and the related instructions. (The final 2010 payment which was deferred to 2011 is considered 2011 income since it wasn't paid until 2011.)

Finally, this employer cannot combine her 2010 and 2011 earnings on the 2011 1099-MISC. They can only report their 2011 payments to her.

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