1099-MISC question

[mateosbaby]

My husband owns a small business. He got paid in 2007 for work for a client and reported it on his 2007 taxes. Now we got a 1099-MISC form from that client for the same amount but paid in 2008. My husband does his in an accrual basis, and evidently the client does this in a cash basis. Since we already reported this income on our 2007 taxes, how do we rectify this? I could amend 2007's, but he would have to do his on a cash basis, which isn't right for his company. But we are forced now to claim this money in 2008 because of the 1099. I hope the answer is simple.

Thanks for your help,
Sara

[sabrelvssammy]

call the 800 number for the IRS and explain the situation to them...they should be able to direct you to the dept that can tell you what to do....

[Denvergirlie]

It's time to call in a professional... call the IRS or talk to your tax professional.

[mombottoo]

If your dh was paid for the work in 2007, then the income is counted in 2007. If the work was done in 2007, but paid for in 2008 the income would be claimed for 2008. Maybe the guy he did the work for waited to use it as an expense for 2008, because he didn't need the deduction for 2007...in which case it's not going to be your problem.

Call the man who issued the 1099 first and see what he says...if it was issued in error then he will have to re-issue a corrected 1099 showing -$0-. If that doesn't work, call the IRS and tell them you have received a 1099-misc in error for income that has already been reported.