owners who did not pay

[Jack_Berry]

i drove for 2 owners in 2008 who did not pay me. one i have a judgement against. the other is way out of state. i do not expect to receive a 1099 from either owner.

do i show an estimate of what is owed by each?

one owner owes me for expenses i covered like an oil change and motel rooms and meals when his truck broke down.

will the irs take this into account when they file their taxes?

 

[moose]

JB ,
Hers a hint ,
lets say you are working for the same owner for 3 years or so.
you get a 1099 for the money you have received in 2007
and by 2009 you get a 1099 for the money you have received in 2008 .
regardless of the fact that some of the money you have received in 2008 was for work being done in late 2007 .

you report an income on the tax year in which the money was received , rather then the tax year in which the work was done.

you report expenses on the tax year in which the receipt belong to.

that's why it is important to know your #'s before the end of the tax year .

Make seance ?



Moose.

 

[pjjjjj]

JB ,
Hers a hint ,
lets say you are working for the same owner for 3 years or so.
you get a 1099 for the money you have received in 2007
and by 2009 you get a 1099 for the money you have received in 2008 .
regardless of the fact that some of the money you have received in 2008 was for work being done in late 2007 .

you report an income on the tax year in which the money was received , rather then the tax year in which the work was done.

you report expenses on the tax year in which the receipt belong to.

that's why it is important to know your #'s before the end of the tax year .

Make seance ?



Moose.

That definitely doesn't make sense to me. But interesting point. The way I enter everything into our accounting program is date-based. That way i can track expenses according to same time the revenue was earned. And when a business invoices someone for services rendered, it counts as income on the date of invoice, vs the date the customer actually pays their invoice.
However, when our accountant did our tax return for 07, he took out a pile of revenue and put it into 08 instead, because the carrier had not paid it yet, as shown on the '1099' for 07. It was one of those things where they took several months to look into why a settlement wasn't paid properly, and ended up going into the next fiscal year. And yet the expenses incurred to earn that income had to be claimed in 07.
So now for 08, we will have a whack of income with no offsetting expenses to claim against it. Doesn't seem right to me.
Mind you, we are in Canada, so might be different. But what Moose is describing appears to be the same.
In JB's case tho, because he probably won't ever see that money, I would be tempted to include the unpaid revenues for 08, and then claim an expense for bad debts in the same amount. In the future, if they ever end up paying, he'd have to make an adjustment at that time to say it was collected.

 

[Jack_Berry]

moose, i know the numbers. i have the sheets from acct deptat the company involved. so i do not report earned but not received income in 2008 until something happens and then report it if it ever comes in that year? huh.

 

[Fkatz]

i drove for 2 owners in 2008 who did not pay me. one i have a judgement against. the other is way out of state. i do not expect to receive a 1099 from either owner.

do i show an estimate of what is owed by each?

one owner owes me for expenses i covered like an oil change and motel rooms and meals when his truck broke down. you take the expense as a deduction. on yur return.

will the irs take this into account when they file their taxes?

NO,

If one of the Owners was Robert Campbell or his brother, out of Western PA, Dont expect it, these owners will not pay you

1. From your estimates of what is owed you, or according to the trips you made, enter all of the income even though you did not get it, on your tax return Sch C.
then take all of the expenses that you incurred and enterthem against the income, just as if you recieved the 1099's, I have had an instance where the owner held the 1099 until after the current filing year and then sent it out after april 15 just to mess upo his drivers.

Just file your return as if you recieved the 1099's and don't worry about it,
then go after him/her or both ASAP

The main thing is that your Return was filed based on the information that you calculate,

Frank
Franklin Katz, ATP,PA, CPB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934



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