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Twice a month, get clear, smart tips to help you keep more money, build wealth, and make taxes easier for 1099 CRNAs.
Bill White:
Hey everyone, welcome back to Money Moves for CRNAs, the place where 1099 CRNAs come to get clarity, confidence, and control over their money. Before we begin, remember, this podcast is for educational purposes only. For personalized guidance, always work with a qualified tax or financial advisor.
If you're a 1099 CRNA, you've probably lived this nightmare. You open your 1099 NEC, expecting it to match what actually hit your bank account, and bam, the number is way higher than what you were paid. Or worse, you're waiting for a 1099 that never shows up at all.
Now you're wondering, did I mess up? Will the IRS think I'm hiding income? Trust me, you are not alone. Incorrect and missing 1099s happen to CRNAs every single year. And today, we're going to break down exactly why it happens and what you must do to protect yourself from IRS problems that you didn't cause.
Here's your host, Randy Larkin, CPA from Atlanta Tax Planner. Let's dig into what CRNAs need to do when their 1099 is missing, or just plain wrong.
Randy Larkin:
Hi, this is Randy Larkin.
Let's start today with the story that many 1099 CRNAs know all too well. Imagine you finish your tax paperwork for the year, and you're feeling pretty good. You open your mailbox or your email, and there it is, your 1099 NEC.
You expect it to show the money that actually went into your bank account. But when you look at the number, your eyes get wide. It's much higher than what you remember getting paid.
At first, you think you misread it. But no, the number is definitely wrong. Maybe it includes money paid late. Maybe it includes work from the next year. Or maybe it's a total mystery. And then, just when you think that's bad, another problem pops up.
One of the places you work never sent a 1099 at all. You know you earned money there, but there's no form anywhere. So now you're wondering, what do I do? Will the IRS think I messed up? Will I get in trouble because they made a mistake? If any of this sounds familiar, you're not alone.
1099 CRNAs deal with wrong or missing 1099s all the time. It's one of the most common issues 1099 CRNAs face during tax season, and today we're going to walk through why it happens and what you should do when it does. First, let's talk about how a 1099 NEC is supposed to work.
The 1099 reports how much income you received for the year, not how much you billed, not how much the hospital thinks you earned, not what they deducted. It should show the money that actually arrived to you during that tax year. But many payers, like hospitals, anesthesia groups, or staffing companies don't understand this rule.
Some think they should report the full amount billed. Others think they should report the amount they deducted for their own taxes. Still others just guess based on their books, and this leads us to a huge number of mistakes.
Here's one of the most common examples CRNAs experience. A 1099 CRNA works three jobs during the year. Each job pays $100,000, so the total billed amount is $300,000, but not all payments arrive before December 31st.
The last payment of $20,000, let's say from the third job, doesn't show up until January of the next year. This means the CRNA actually received only $280,000 during the tax year into their bank account. But what does the payer do? They all send 1099 showing $100,000.
They list the full amount billed or paid, even though part of the money wasn't received until the next year. If you're a 1099 CRNA, you know exactly how this happens. You work shifts in late December, payroll runs late, the check or the deposit hits your bank account in January, and suddenly is showing up in last year's 1099.
This mistake creates huge problems. If you report only the $280,000 you actually received, the IRS computers will see the mismatch and will send you a letter or start an audit. But if you report the full $300,000, you'll be paying taxes and money you didn't even receive that year.
That's not fair and that's not correct. Now let's look at another very common problem. A missing 1099.
Sometimes you expect to receive a form from a place you worked, but nothing arrives. Maybe the payer forgot. Maybe they changed the payroll systems.
Maybe they mailed it to the wrong address. Or maybe they never issued one at all. But here's the important point.
Even if you never receive a 1099, you still must report the income. This surprises many CRNAs. The IRS rule is clear.
The responsibility is on you to report whatever you earn, not on the payer to send the form. This means your own bookkeeping matters more than the 1099 itself. So let's talk about what you should do when a 1099 is wrong.
The first step is simple. Ask for a corrected form. Contact the payer and explain the mistake.
Tell them what you actually received and show proof if needed, like bank deposit dates, pay stubs, or even the envelope the check arrived in. Many payers will fix the form once you point out the error. But sometimes they won't fix it.
Maybe they don't understand the rules. Maybe they disagree. Or maybe they just don't want to do the paperwork.
If that happens, don't panic. Here's what the IRS allows you to do. If the payer won't correct the form, you report the incorrect amount, but then you subtract the difference as an other expense.
This keeps the IRS computers happy because the number on your tax return matches the number on the 1099, but it also keeps your income accurate because you remove the incorrect part. This protects you from audits and keeps your taxable income correct. It's simple, clean, and completely allowed.
Keep proof. Save emails, letters, screenshots of bank deposits, and copies of requests for correction. If the IRS ever wants more information, you'll have everything ready.
When you understand how to handle incorrect or missing 1099s, tax season becomes much less stressful.
You stay in control, you avoid paying extra taxes, and you protect yourself from IRS problems that you didn't cause in the first place.
Bill White:
That wraps up today's episode of the Money Moves for CRNAs. If your 1099 is wrong or missing, don't panic.
You now have the tools to handle it confidently. Make sure to share this episode with another CRNA who might be dealing with the same thing. And if you want help reviewing your 1099s, planning your taxes, or looking ahead to a stronger financial year, reach out at crnataxes.com anytime.
Thanks for tuning in and keep owning your 1099 CRNA journey with clarity and confidence. Music licensed from premiumbeat.com under license number 7394047.