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I have already filed and received returns for federal and state. Part of the income reported was cash for a side business cleaning houses (wifey). Last week, the lady my wife cleans with/for handed her a 1099 MISC for all the money she made with her. Thing is, we reported this income for her cleaning which totaled more than the amount on the 1099 MISC (she has other cleaning jobs besides with this lady friend).

My concern is that if I don't amend, is the IRS going to come after me when they get the paperwork from this lady? Or will they understand that it was the cash income we reported that didn't have a 1099 for it at the time?

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Why would the IRS be coming after you if you reported the income? If you reported everything, then the IRS will use the 1099 to cross-check, see that everything is in order, be happy and done with it.

The lady was supposed to give you the 1099 by the end of January, and she may be penalized by the IRS for being late, but as long as you/wifey reported all the income - you're fine.

It was supposed to be reported on Schedule C or as miscellaneous income on line 21 (schedule C sounds more suitable as it seems that your wifey is in a cleaning business). But there's no difference in how you report whether you got 1099 or not, so if you reported - you should be fine.

  • I reported it, yes. But is the IRS going to know that this 1099 income is what I reported as cash from the wife's cleaning business? I just assumed they would attack me and I'd have the burden of proof. – Captain Claptrap Mar 23 '13 at 15:07
  • I'm in the same position as Claptrap. How will the IRS know that some of my reported cash earnings included these earnings? – Elliott B Mar 18 '14 at 17:43
  • They'll ask you if they can't figure it out. Its called "correspondence audit" - they send you a letter and you reply. – littleadv Mar 18 '14 at 23:35

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