"Oh No, I Lost My 1099" Here's What You Need To Do
If you lost your 1099 form, your first instinct might be to panic. But don’t. Even if you lose a Form 1099-MISC (for miscellaneous income) or 1099-NEC, you can replace or still file your tax return without delay.
That’s because you don’t have to file your 1099s with your income tax return like you do forms W-2. Just be sure to include all taxable income on your tax return and you’ll have little to worry about.
There are many reasons for why you may have not received a 1099. For example, not every customer is required to send you a Form 1099. You may think you lost a 1099, but in fact, one was never sent to you. That’s because they are only required when the client pays an independent contractor at least $600 in a year for services and the business isn’t an S or C-Corp.
In this article, we'll go over exactly what to do if you lost your 1099 tax form.
How To Get A Replacement 1099
Calling your client is usually the easiest way to get a copy of a lost Form 1099. Your customer or the issuer is required to keep copies of the 1099s it gives out to non-employees.
You’ll want to ask for a copy of the one they already sent you. If for some reason they can’t find their copy, make sure they don’t issue you a new one. Since companies supply copies of all 1099s they issue to taxpayers to the Internal Revenue Service and the 1099s are linked to your Social Security number or Employer Identification Number, the IRS may think you received twice the amount of income. If you report less income on your tax return than the IRS has been notified that you made, you’ll almost certainly hear from the IRS. This is why the IRS will know if you don't file your 1099.
You may need to be patient. If your customer is a large company, you may have to wait a few days for them to sort through their records and tax statements to find your 1099.
Filing Without Your 1099
We’ll highlight three ways you can still get your taxes filed without all your 1099s. These tips also work for self-employed taxpayers who haven't received their Form 1099.
1. Sum Your Invoices or Receipts
If you know which 1099 you lost, you can review the invoices you sent that customer to get the total amount you earned. Add up the invoices and include that in your taxable income on your tax return.
Or similarly, if you issued receipts, you can add up all the receipts you gave to the payer.
The important thing is to report all your income to accurately calculate your income tax liability. And if you find that you forgot to include some income, you can always file an amended return.
2. Review Business Bank Accounts
Although this method might be a bit trickier if multiple customers’ payments are included in one deposit, you can review your bank statements from your business bank account. Some financial institutions may provide an annual summary of activity that may be helpful.
Since you may not receive a Form 1099 from each customer you work with because you made less than $600 in a calendar year, reviewing your bank account is also an excellent way to verify that you’ve included all income on your tax return, including payments for which you didn’t receive a Form 1099.
While we’re on the topic of reporting all income, if some clients pay you in cash, don’t forget about that. Keep a log of cash payments you receive throughout the tax year. Even though you may not have deposited it into your account, it’s still considered taxable income.
3. Order an IRS Transcript
Your final option is to order an IRS transcript and will only be helpful if you file an extension. Simply go to the Get Transcript tool at IRS.gov and submit a request.
The IRS has numerous transcripts you can request that show up to the 10 previous years of historical information.
You’ll want to be sure to order the Wage and Income Transcript. This transcript includes data it receives about various IRS forms used for informational wage reporting, such as Form W-2 and 1099s.
It’s important to remember that the prior year’s transcript isn’t available until after the April income tax filing deadline. So, for 2020, you can get your wage and income transcript in May 2021.
Registering and ordering online will give you immediate access to your transcript. If you prefer to use old-fashioned mail, you’ll need to complete the application, verify your identity by stating the mailing address from your latest tax return and wait for 5 to 10 calendar days to receive your transcript.
IRS.gov has a great list of FAQs for transcript requests to help you.
Penalties You Can Receive
While there are no direct penalties for losing 1099s, if you fail to file on-time without filing for an extension because you're looking for or waiting on 1099s, you are subject to penalties for late 1099s. This includes the failure to file penalty and a failure to pay penalty if you owe tax which can quickly add up to 25% of the total unpaid tax.
It will be even worse if you fail to report all your taxable income on your federal tax return as you could face severe consequences up to and including criminal prosecution for tax evasion.
Ways To Prevent Losing Your 1099
Find an organizational system that works for you. It could be as simple as a file folder you keep where you put all your tax documents each year.
Or you could use technology by scanning to create an electronic copy of your 1099. Keep a folder on your computer where you'll keep your electronic tax documents for easy access. Don't store your tax documents on the cloud since they often include all your personal tax information as well as your Social Security number.
Now Go Get To Filing!
Even without all your 1099s, you can still file an accurate tax return. Good recordkeeping is key for filers. Since you need to retain your business tax documents after you file your return to support all your income and deductions, this information can easily be used to complete your tax return. We recommend using our tax receipt organizer to help you track your expenses and eliminate the hassle instead of a tax professional. We'll track and code all your business expenses for easy income tax return preparation.