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Taxpayer has about 30 separate 1099. They include mostly 1099-MISC / 1099-NEC / 1099-K.
1. Is it absolutely necessary to enter all 1099 individually, and then link them to Sch C? Or can the total be entered on Sch C top line alone?
2. Some are issued to the EIN of the LLC that the taxpayer formed, while others are issued to the SSN. I am assuming this requires two separate Sch C?
3. In general, assuming no withholding on the 1099, in what circumstances is it necessary to enter the 1099?
4. What if the taxpayer eventually has an S-Corp, but the 1099 are still issued to the SSN of the sole owner of the S-Corp, even though the funds were deposited into the business bank account of the S-Corp and reported on the S-Corp tax return?
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Recommend to NOT use the 1099 entry sheets; instead total and enter directly on the actual line of the correct form.
LLC is a disregarded entity (same as the self-employment) so SSN vs EIN does not matter.
I like to create a supplemental list for my records (and share with client but not with IRS)
necessary to enter 1099R
If he forms an S-corp he needs to contact those who pay his company & get them to use EIN.
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So 1099-Misc / NEC / K are not required to be entered individually?
And they can all go on the same Sch C, even though some of the 1099 are issued to EIN and others to SSN?
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1. These are not your taxpayer client's records. 1099-K is from a payment settlement entity. If your client runs customer payments through Venmo or PayPal, that is duplicated data from 1099-NEC or Misc in many cases. If your taxpayer has any private citizens as customers, there would never be any 1099-NEC or MISC issued, because private citizens don't issue them. Only business to business activities result in issuing 1099-NEC and that's issued when the annual amount has reached at least $600.
That means your client might make $3 million in business and never get any 1099. Would you then put $0 on the tax form? Of course not. You need the client's full records. You review the documents issued as part of due diligence.
2. Single Member LLC = disregarded entity. One operation, one Sched C.
4. Your client needs counseling when they form a corporation. They will fill in a W9 and I like to include a letter for "we are now doing business as XYZ S Corp" and your client signs as President. And now your client has to be running payroll.
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