General Question

JonnyCeltics's avatar

Should I be receiving a 1099-MISC if I was paid through paypal for contract work from my former employer?

Asked by JonnyCeltics (2721points) February 19th, 2012

I worked under contract this summer for a company. Was paid over $600 (anything below a 1099-MISC isn’t sent out). I was paid through paypal, where taxes were not taken out…as it then becomes my responsibility to pay them around tax time.

But I’ve yet to receive a 1099-MISC form. I have totals from what I was paid. Can I log this otherwise in my taxes? I’ve already reached out to see if they will be sending me one, but I assume I won’t be. What should I do?

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9 Answers

john65pennington's avatar

I am not a CPA, but I do my own taxes.

To me, this is a way for your company to circumvent the law in order to not have to send you a 1099-MISC form. If you have asked the company and no reply, then ask PayPal. Someone will have to be accountable.

You have until April, 2012 to file your income tax report and I would wait for an answer from PayPal, also.

If neither responds to your request, I would include it in your income taxes with a letter of explanation. It will go either way with the IRS…..accept as is or request more info from you by mail.

JonnyCeltics's avatar

My income, as I am a student, is very low. I have a feeling you are correct in your assessment that the company may not want to send me one…but there’s a track record of it…so why ignore it?

john65pennington's avatar

Some companies will do anything to dodge paying and keeping income tax records. A good example are people that gather and sell wooden pallets They are paid cash, under the table, and no records for income tax purposes. I shut down an operation like this with the help of two Criminal Investigation Agents of the IRS. Several people arrested.

Be honest and include what you have told us and you should be okay.

jaytkay's avatar

Creating a 1099 or not is the payer’s problem, not yours.

@john65pennington is correct, you don’t need the 1099 to file your taxes. Just submit the correct numbers and keep the records you need in case you need to back up your return in the future.

The IRS is NOT going to complain and say “Hey. you can’t list income without the proper paperwork!”

A problem DOES arise if the payer creates a 1099 (or W-2) with your Social Security # and you do not report the income.

marinelife's avatar

Yes, you can report the income. You have documentation.

DrBill's avatar

I really wish those who have little or no tax knowledge would leave the tax questions to tax professionals, there are several on fluther who know the actual answers and not just guessing.

If your employer does not send the required documentation so you receive it by February 15, you should file your return by entering the information on a substitute 1099, As a contract worker you will also need to file this income on a schedule C.

BTW you can be charged with tax fraud for creating your own 1099 or W-2

SavoirFaire's avatar

@jaytkay The IRS actually may complain if you claim income without the proper paperwork. Being honest got my father-in-law in a hell of a lot of trouble about 20 years ago. They can get you for anything if they feel like it.

JonnyCeltics's avatar

@DrBill what’s a substitute 1099 if not a creation of a 1099? (or I imagine there is something called a “substitute” 1099—but even then wouldn’t it be creation?) thx, btw.

DrBill's avatar

The substitute 1099 lets the IRS know the employer did not complete it. It can be completed using your records by the person doing the taxes, even if that is you, but it will trigger the IRS to check the validity, as opposed to accepting it as valid, and being checked at some later time.

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