Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

My Dad started a business last year and I opened a merchant

account for credit card processing...
My Dad started a business last year and I opened a merchant account for credit card processing under my ssn, I recieved a 1099 for the income. Is it possible for my Dad to put this on his tax return and if not can i have the merchant company change it to his ssn.
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 hours by:
3/18/2013
Dave CPA
Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
Experience: Vast knowledge within the accounting/tax industry
Verified

Hello, In order for your dad to claim the income you have to send him a 1099 K. This type of transaction would be considered a "nominee/middleman" situation. You file the 1099-MISC and 1096 and then your dad would report the income. In response to the IRS, you would send a letter explaining the facts and then a copy of the 1099MISC you sent to your father/IRS.

 

Please let me know if you have any questions before you rate my answer. A positive rating is what I strive for. Regards Dave

Ask Your Own Tax Question
BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience: Owner of a CPA firm
Verified

Hello and thank you for your question.

.

You do not have to file a 1099-Misc showing payments to your dad. The tax code does not require information reporting in order to be able to properly claim income and deductions (IRC 61). You simply need to properly report income and deductions regardless.

.

Your situation is actually quite common with lawyers and doctors who often do business as corporations, where the corporations recognize the income, but 1099's get erroneously issued to the individuals instead of the corporations.

.

If you did file a 1099-Misc, then you would have to e-file by the end of March or face a late filing penalty, so this will cost you money either way if you file a 1099.

.

Your situation is the result of a bad information return (ie... a bad 1099). It should have been issued to your dad according to what you say. The proper fix is to have them re-issue the 1099 with your dad's information and leave you out of this all together.

.

In order to file your tax return and avoid an IRS notice, report the 1099 on your return. The amount should show as earnings on line 1 of Schedule C. Also on Schedule C, show a matching refund amount on line 2 and include a statement indicating that the money was earned and reported by your dad (use line 2 on Schedule C, and not an expense line, to avoid potentially impacting other calculations on your tax return). Include your dad's social security number.

.

By doing the above, your income on Schedule C should be $0 but at the same time you will have reported the 1099. This way, the IRS computer can match the 1099 amount and not flag your return for a potential error (the IRS also received a copy of the 1099).

.

I hope this is helpful.

BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience: Owner of a CPA firm
Verified
BK-CPA and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask BK-CPA Your Own Question
BK-CPA
BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
933 Satisfied Customers
Experience: Owner of a CPA firm

BK-CPA is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Situation Received 1099-MISC but should have received a W-2.
Situation Received 1099-MISC but should have received a W-2. Form 3949-A was filed. Want to do a return to include the amount on the 1099-MISC but only paying the employee share of SS/Med. I believe t… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,280 satisfied customers
DO I HAVE TO REPORT PURCHASES OF METALS ON A 1099 AND DO I
DO I HAVE TO REPORT PURCHASES OF METALS ON A 1099 AND DO I HAVE TO REPORT SALES OF METALS ON A 1099? DOES THE PERSON WHO SOLD ME THE METALS OR BOUGHT THE METALS ISSUE OR RECEIVE A 1099? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Does copy 1 of the 1099-MISC have to be filed with NYS? I am
Does copy 1 of the 1099-MISC have to be filed with NYS? … read more
Carter McBride
Carter McBride
LLM
247 satisfied customers
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
WHAT IS 73-10? California. IRS in my credit report
WHAT IS 73-10? JA: What state are you in? It matters because laws vary by location. Customer: california JA: Has anything been filed or reported? Customer: IRS in my credit report JA: Anything else yo… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Under the new Tax Cuts and Jobs Act, does a Schedule C sole
Under the new Tax Cuts and Jobs Act, does a Schedule C sole proprietor qualify for the 20% deduction of qualified business income or is this only available to S Corp shareholders & LLC's?… read more
Patrick Mullis
Patrick Mullis
Masters
18 satisfied customers
Lev we spoke on the phone regarding the amended schedule c
Lev we spoke on the phone regarding the amended schedule c questionnaire. When I do my schedule c business again, will I use the schedule C form 2017?I am assuming that is correct, the C4 questionnair… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
A law firm (which is a Schedule C filer) has gross income of
A law firm (which is a Schedule C filer) has gross income of 1,000,000 & Net Income 0f 280,000. In the tax reform just passed, there is a 20% deduction for law firms that have income less than 315,000… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
Under the new tax plan, can a Schedule C proprietor still
Under the new tax plan, can a Schedule C proprietor still deduct her health insurance premiums on page 1 of Form 1040 & are there any medical expenses she can still deduct on Schedule A (if they excee… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
I over-reported income on 1040 in 2012. Will filing a 1040x,
I over-reported income on 1040 in 2012. Will filing a 1040x, adjusting off the over-reported income, trigger and audit?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
On a schedule c who do you put as the proprietor if it is a
on a schedule c who do you put as the proprietor if it is a newspaper route and you are given a 1099-misc … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
82 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I am a personal injury attorney doing a schedule c as we
I am a personal injury attorney doing a schedule c as we speak. . … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Small schedule c business donates fully depreciated
small schedule c business donates fully depreciated furniture to charity. They've been told that the FMV is $1,000. What is the deduction for contributed property? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
My bank send a 1099-misc for $1000 of interest instead of
My bank send a 1099-misc for $1000 of interest instead of 1099-int. It was checked at box 3 however I am not sure is business checking incentive constitute "prize winnings" ? Because otherwise I would… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Filing my tax returns - did not receive a 1099 from aetna?
filing my tax returns - did not receive a 1099 from aetna? but i see it was put on return the last two years ( I've moved) don't even know what this is for but act asking for it … read more
abci168
abci168
Principal
27 satisfied customers
S-corporate 100% owner incorrectly issued herself 1099-Misc
S-corporate 100% owner incorrectly issued herself 1099-Misc for health insurance premium payments for 2016. what is the best way to correct this situation now? To report amount reported on 1099 on sch… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x