1099-NEC doesn't match my records after I had to chase the client for it

I'm so frustrated right now! I did freelance social media management for this small business throughout 2024, and I've been keeping meticulous records of all my earnings (learned my lesson the hard way a few years ago). According to my records, I earned $7,830 from this client last year. I had to practically harass them to get my 1099-NEC form - sent multiple emails in January, followed up with calls in February, and finally received it yesterday after threatening to report them to the IRS. The problem is, the form shows I earned $9,450! That's over $1,600 more than what I actually received! I've gone through my bank statements three times and added up all the payments, and there's no way I received that much. I'm worried about filing with incorrect information, but I'm also concerned about confronting this client since our relationship is already strained after the 1099 ordeal. Has anyone dealt with something like this before? Do I report what's on the 1099-NEC or what's in my records? Will the IRS come after me if there's a discrepancy? I need to file soon but this has me totally stressed out!

0 coins

19 comments

Ahooker-Equator

•8M

This is unfortunately pretty common with some clients. What you need to do is reach out to the client and explain the discrepancy. It's likely they made a calculation error or included payments that actually went out in early 2025 or something similar. Ask them to issue a corrected 1099-NEC. This is done using the same form but marked as "CORRECTED" on it. They're obligated to do this if the information is wrong, and it's in their best interest too since they're also reporting incorrect information to the IRS. If they refuse to correct it, you should still file your taxes based on your actual income (the $7,830). On your Schedule C, report the full amount shown on the 1099-NEC ($9,450) as your gross receipts, then subtract the difference ($1,620) as an expense labeled as "1099-NEC correction" or "Income overreported on 1099-NEC." This way, your net income will reflect what you actually earned, and your tax return will match your actual income.

0 coins

Ahooker-Equator

•8M

Filing this way won't automatically trigger an audit. The IRS matches 1099 forms with tax returns, so if you reported less than what's on the 1099 without an explanation, that would definitely raise a flag. But by including the full 1099 amount and then making an adjustment, you're properly documenting the discrepancy. Keep all your evidence - bank statements, payment records, invoices, and communications with the client about the issue. If you're ever questioned, you'll have a clear paper trail showing you only received $7,830 despite what the 1099 says.

0 coins

Tyrone Hill

•8M

After dealing with similar 1099-NEC nightmares for years (why is it ALWAYS such a struggle??), I finally tried https://taxr.ai this season and it was a huge time-saver. I uploaded my bank statements, payment records, and the incorrect 1099, and their system helped identify the exact discrepancies and gave me documentation to prove my actual income in case of an audit. The report they generate basically shows exactly what payments you received, when they came in, and compares it to what's reported on the 1099. Makes it super easy to approach the client with specific evidence or to prepare for potential IRS questions if the client won't fix their mistake.

0 coins

Tyrone Hill

•8M

Yes, it definitely works with multiple 1099s! You can upload all of them at once and it will process each one separately, matching them to your bank deposits. It's actually more helpful when you have several because it organizes everything by client automatically. For cash payments, they have a feature where you can manually log those transactions and upload any supporting documentation you might have - like receipts you wrote, text messages confirming payment, or your own accounting records. The system will incorporate those into your overall income analysis and flag any potential documentation gaps that might need additional support in case of an audit.

0 coins

Toot-n-Mighty

•8M

Just wanted to update after trying https://taxr.ai that someone mentioned! After reading about it here, I decided to give it a shot with my complicated freelance situation (6 different 1099-NECs with 2 having errors). The platform was surprisingly straightforward - I was worried it would be overly technical, but it walked me through everything step by step. After uploading my documents, I got a detailed report showing which 1099s matched my actual deposits and which ones had discrepancies. Ended up using their documentation to get one client to issue a corrected 1099-NEC, and for the other one who refused, I now have solid backup for reporting it the way the expert suggested (listing full amount then deducting the difference). Feeling much more confident about filing now!

0 coins

DeShawn Washington

•8M

If you're still having trouble getting your client to issue a corrected 1099-NEC, you might want to try contacting the IRS directly. I was in a similar situation last year, but calling the IRS was IMPOSSIBLE. Kept getting disconnected after waiting on hold for 2+ hours multiple times. Finally found https://claimyr.com which got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was super helpful and explained my options for dealing with the incorrect 1099. They said if I had documentation of my actual income (bank statements, invoices, etc.), I could file based on the correct amount and include a written explanation of the discrepancy. Made me feel a lot better about the whole situation.

0 coins

DeShawn Washington

•8M

It doesn't exactly "jump" the queue - from what I understand, they use an automated system that continually redials the IRS using multiple lines until one connects, then they transfer that connected call to you. So basically they're doing the frustrating redial work for you. The reason it works is because most people give up after a few tries, but their system just keeps going until it gets through. As for being a scam, I was skeptical too, but it literally just transfers you to an actual IRS representative - you're talking directly to the IRS, not to some third-party service trying to "help" with your taxes. They just get you the connection and then you handle your own tax business yourself.

0 coins

Sofía Rodríguez

•8M

I need to eat my words from my previous comment. After continuing to get nowhere with the IRS on my own for another week, I broke down and tried Claimyr out of desperation. It actually worked! Got connected to an IRS agent in about 22 minutes (still had to wait, but nothing like the 3+ hour waits I was experiencing before getting disconnected). The agent helped me understand exactly what documentation I needed to resolve my issue. For the original poster's 1099-NEC problem, having a direct conversation with the IRS might really help clarify the right approach. The agent I spoke with explained that mismatched 1099s are actually pretty common and they have established procedures for handling them.

0 coins

Aiden O'Connor

•8M

I'm a bookkeeper for several small businesses, and I see this 1099-NEC issue from the other side all the time. Sometimes the error happens because the accounting software counts all invoices created during the year, not just the ones that were paid. Another possibility: did you have any expenses that the client reimbursed you for? Some clients incorrectly include expense reimbursements in 1099 totals, which they shouldn't if those were legitimate business expense reimbursements. I'd suggest checking your invoices against the client's records. It might be that they're counting an invoice you sent in December that didn't actually get paid until January 2025, which would belong on next year's 1099.

0 coins

Aiden O'Connor

•8M

That's almost certainly the issue then! The $1,500 in reimbursed expenses plus your $7,830 in actual income equals $9,330, which is very close to the $9,450 they reported (the remaining $120 difference could be a calculation error or another small reimbursement you're forgetting). Reimbursed expenses should NOT be included on your 1099-NEC if they were legitimate business expenses. The client should issue a corrected 1099-NEC showing only the $7,830 in actual service income. If they included the reimbursements, they're reporting it incorrectly. Take this explanation to your client and specifically point out that expense reimbursements shouldn't be on the 1099-NEC. Many small businesses don't realize this and their accountants might not catch it if they're just given total payment figures.

0 coins

Ahooker-Equator

•8M

You're right that reporting MORE income than what's on your 1099-NEC won't trigger IRS concerns - they're generally more worried about underreporting. However, for your own protection and record-keeping, it's still best to request a corrected 1099-NEC that accurately reflects what you were paid. The reason is that your client is likely taking a tax deduction for what they paid you. If their records show they paid you $2,000 more than what they reported on your 1099-NEC, that discrepancy could potentially cause problems for them in an audit, which could circle back to questions about your income.

0 coins