Form Mistakes Make Tax Time a Mess — 1099 Tax
Google, Commission Junction among this year’s screw ups.
If you’re an unincorporated domainer — that includes sole proprietors and limited liability firms — in the United States, January and February are the months of 1099s. Any firm that paid you non-employee income of $600 or more is required to send a 1099 form with your total compensation paid during the tax year. 1099s are sent to the Internal Revenue Service and to you, and you’re expected to note each 1099 with your tax return.
It sounds simple, but it never goes as planned.
Following getting my 1099 correct for a number of years, this year Google (NASDAQ: GOOG) sent my 1099 with my personal name rather than firm name. I contacted their “dedicated” 1099 support group, which promptly replied…in a couple weeks. They assured me that a corrected 1099 will arrive by April 15. (Google’s lack of support is one more reason I’m happy we have domain parking firms to act as middle men. They actually provide prompt support.)
Then there’s Commission Junction, which sent a 1099 to me ahead of the January 31 deadline. Yesterday in the mail I received the following notice from the affiliate network:
“We just discovered that your IRS Form 1099 for 2008 did not include amounts for the month of December. Consequently, your corrected Form 1099 which includes all 2009 payments…will be sent to you in the mail no later than February 24.”
Here’s the confusing thing. The letter, dated February 23, was sent with an updated 1099 form that appears to include December revenue. So is this the corrected 1099? Or ought to I expect another one?
As a limited liability firm, I’ve given up on filing my taxes early. Even if my taxes are done in advance, I have to wait until April to make sure I don’t receive any more of these “oops” letters.
The Commission Junction letter concludes with a stark reality of why you can’t file your taxes early:
“If you have by now filed your 2008 tax return, we suggest contacting the IRS directly or your preparer to discusses whether an amended tax return is necessary.”
The sad thing is you’ve probably noted all of your Commission Junction revenue in your tax return, but you now have a red flag with the IRS since your 1099 forms don’t match.
