If a self-employed person filling out a Sch C has income from a source whereby the employer does not file a 1099, that income would go on line 1a.
Just curious if that raises a red flag. Does the IRS expect all income to have a W2 or 1099 for all income? Would they question where self-employed Sch C income comes from if not from a 1099?
Thanks,
RB
I’m not sure what you’re talking about here. There is no ‘line 1a’ on Schedule C - just line 1, with a box that you check if the income was reported to you on a W-2 and the ‘statutory employee’ box on that W-2 was checked. On Form 1040, there is a ‘line 1a’ but, again, it’s only for income that was reported to you on a W-2, not 1099 income. In either case, it’s related to W-2 income, not 1099 income.
No.
They may. It’s best if you have documentation showing how much you received, because the concern is probably more that you didn’t report enough income, rather than that you reported too much. But just because you don’t have a 1099 or a W-2 doesn’t relieve you of your obligation to report the income.
AJ
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Thanks for your thoughts.
One thing: Turbo Tax sch C has line 1a: gross receipts not reported on 1099.
And 1b: gross receipts reported on 1099.
RB
On the Schedule C form itself? Or just when you are answering the interview questions for Schedule C? Because the actual Schedule C form from the IRS f1040sc.pdf (irs.gov) only has line 1:
so any extra lines that TurboTax has thrown in are not compliant with the IRS form.
AJ
Well, the TT form says all the same stuff at the top as the real Sch C, so it sure looks like the official Sch C, but when I go to print it, it is different and you are right. So it’s a moot point about whether the income I claim is from a 1099 or not. It’s just combined on the actual Sch C.
Some of my clients 1099 me, some don’t. Been doing it for 20+ years and have not yet been questioned by the IRS.
Hi RB,
For self-employed individuals, income should be reported on Schedule C regardless of whether a 1099 was issued. It’s important to accurately report all income to avoid any issues with the IRS. If in doubt, consulting a tax advisor can provide clarity on your specific situation.
Yes, I know. That was my point. They don’t question income reported w/o a 1099.