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There is a simple fix for this. You will need to file Schedule C (self employment income) with your tax return this year. Show the $30,000 as income. Then show it as an "other" expense with an explanation that the deduction is being used to correct the 1099 reporting. That will then zero out. You should also attach a copy of the contract acknowledging that your new employer received the money. It will, unfortunately, require this to be a mail in return since the contract cannot be properly attached to an electronic filing.