I sell water to an oil company. They sent me two 1099’s. One is listed as misc. and one is listed as nec or non employee compensation. I don’t perform any work just receive a check. They are both for the same thing. Can somebody explain why they would do this? It’s a sizable difference in the taxes that I’ll have to pay.
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I had something similar happen. Sold my businesses tools and equipment when I retired last year to one of my customers. They sent me a 1099, even though they shouldn’t have. My CPA told me to contact them and have them submit a corrected 1099 to the IRS for $0.00. There is a box at the top of 1099 to mark as corrected. They sent a new one in a week. Try this with the oil company. -
I imagine the Misc would be the correct one. They may have had you defaulted in their system as NEC then made the change mid year and never reviewed or corrected when they prepared them. However, if you file taxes as a separate entity you may not even need the 1099. My company is incorporated and we get 1099s every year. Nothing for us to do with them besides file them. They are already part of the income we declare, not additional.Comment
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The problem is last time that happened my cpa said I had to pay self employment and Medicare taxes on the next nec which I think will cost me an extra 20k or soon taxes.Comment
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Call them and tell them it is not NEC, it is MISC. Have them correct it. Make sure they have a current and accurate W-9 for you as wellComment
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Whoever submitted the payment for the operator coded the payment (internally) incorrectly. Easy fix for them if you call them. I’ve had to fix a few for a couple of the landowners I work with.Comment
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I’ve contacted them numerous times with no results. They also had wrong social security number. Sent them a new w9. They corrected that but not the nec 1099.Comment
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