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Adding up 1099nec and 1099misc box 6 income for clients

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#1
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1901
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24-Jan-2019 2:16pm
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Shark on a Cash Reef
What do you do in this case?

A client provides a list of categorized expenses, but provides no total gross proceeds number.

Instead, they give you several 1099s only.

I personally will not accept this because I have no way to know if:

1) There is any cash income
2) There is any income that has not been reported on a 1099 (either less than $600 or no 1099 provided as is sometimes the case with s and c corps)
3) If there is additional co-pay income
4) If there is additional income form the sale of products such as supplements for a chiropractor, just for example
5) I am not engaged for bookkeeping with the client and I do not verify or reconcile their proceeds via bank statements
6) I have no way to know if the 1099s are correct, complete, or have been corrected

I email the client with a quick and polite canned response explaining why I can't simply add them up and include my own result, and I ask them to provide "one" total gross proceeds number for the activity.

Do you think I am being a PITA? Too careful?
 

#2
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4943
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22-Apr-2014 3:06pm
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WA State
I ask simply: Do the 1099s report all the income you received during the year? Are there any other income payments we need to account for?
If the reply is a credible 'yes', then I move on.

I have several realtors and landlords who fall into this category. I don't spend a lot of time verifying gross income when I have 1099s.
~Captcook
 

#3
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4-Mar-2018 9:03pm
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The Office
I also don't have a problem with this. Some of my clients do it. I confirm in writing that they have not received any other income during the year other than what is reflected on the provided 1099s, and save their response as support in the file.

You'll waste more time (and likely frustrate them) trying to get them to jump through your hoops than by just pulling out a 10 key and adding up a few 1099s.
 

#4
CathysTaxes  
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Suburb of Chicago
I always enter the 1099s in my tax software let it total them. I ask for any other income they received. Some fools deposit checks that were below 1099 threshold and think it's free money. I remind them that they must report it. If they start spinning tales I tell them I can't complete the return unless I see their bank statements.
Cathy
CathysTaxes
 

#5
NYCCPA  
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160
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23-Apr-2021 5:11pm
Location:
NY
Is it our job as the tax preparer to audit what the client provides? Add up the darn 1099s. Draft an email to the client "Dear Mr/Ms. Client that wants me to work harder than I would like, the total of the 1099s you provided is $xx,xxx, is this representative of the total income you received for year 20XX? Was there any income you received that was not reported to you on 1099s for 20XX? Simple yet effective.
 

#6
Frankly  
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California
"Dear Client,
If we add 10% will that be enough to cover cash income, product sales, and other income for which you don't have a 1099?"
 

#7
sjrcpa  
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5142
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23-Apr-2014 5:27pm
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Maryland
Then you're using an estimate. I would prefer the client to answer the question.

NYCCPA wrote:Was there any income you received that was not reported to you on 1099s for 20XX? Simple yet effective.
 

#8
Beagle  
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166
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16-Jan-2020 3:15pm
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Freelander
NYCCPA wrote:Is it our job as the tax preparer to audit what the client provides? Add up the darn 1099s. Draft an email to the client "Dear Mr/Ms. Client that wants me to work harder than I would like, the total of the 1099s you provided is $xx,xxx, is this representative of the total income you received for year 20XX? Was there any income you received that was not reported to you on 1099s for 20XX? Simple yet effective.



Our job is only to inform them of possible penalties and interest that the IRS may assess on under reported income. It is not our job to verify their income and expenses or audit their bank accounts for potential under reported income.
 


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