Daughter forgot to file 1099-NEC from 2022 - What happens next?

This happens more often than you'd think. Here's what you need to know: • The IRS has a document matching program that typically flags missing 1099 income within 1-2 years • They'll eventually send a CP2000 notice (proposed tax assessment) • The notice will include the missing income PLUS interest from the original due date • They may also add penalties for failure to report • The sooner she fixes this, the less interest will accumulate Best approach is to file an amended return (Form 1040-X) for 2022 before they catch it. This shows good faith and might help reduce penalties.

According to IRS Publication 17, all income must be reported regardless of amount. Under IRC Section 6501, the IRS generally has 3 years from the filing date to assess additional tax, so they're still well within their timeframe for 2022 returns. If she files an amended return now, she'll likely avoid the accuracy-related penalty under Section 6662 (which can be 20% of the underpayment). The voluntary disclosure before being contacted by the IRS demonstrates compliance intent.

I went through this exact situation last year. Here's exactly what to do: 1. First, gather the 1099-NEC and calculate what she would have owed 2. Download Form 1040-X (the amended return form) 3. Complete the form showing the additional income and resulting tax 4. Include Schedule C since it's self-employment income 5. Don't forget to calculate self-employment tax (Schedule SE) 6. Include a brief explanation in Part III about why you're amending 7. Mail it certified with return receipt so you have proof 8. Be prepared to pay the additional tax plus interest (roughly 5-6% annually) I did this and had the whole thing resolved within about 12 weeks.

Omg I was in the EXACT same boat last yr! Had a forgotten 1099 from a side gig. Called IRS like 15x and couldn't get thru to ask Qs. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) and got an agent in like 20 min. They confirmed filing an amended return ASAP was the best move and that I shouldn't wait for a letter. Saved me so much stress! The agent even walked me thru what forms I needed. Def worth it for peace of mind.

Tax professional here. The implications depend on a few factors: 1. The amount on the 1099-NEC (which determines the tax liability) 2. Whether she's had compliance issues before 3. If she files other tax returns on time The IRS uses an Automated Underreporter (AUR) program that matches 1099s against tax returns. For 2022 returns, this matching typically happens in late 2023 through mid-2024 (we're right in that window now, actually). If she files an amended return now, she'll likely just owe: - Original tax due - Interest (currently around 7%) - Possibly a small late payment penalty If she waits for the IRS to catch it (and they will, I promise), add: - Accuracy-related penalty (20% of tax) - Higher interest accumulation - Potential compliance flags on her account Don't let her lose sleep over it though! This is fixable and honestly *snort* the IRS has bigger fish to fry than small contractor income.

According to the IRS website (https://www.irs.gov/businesses/small-businesses-self-employed/amended-returns-form-1040-x), you can now e-file amended returns for 2022, which might speed up processing. The site also mentions that the IRS generally has 3 years to assess additional taxes, but I've seen forum posts where people didn't get notices about missing 1099 income until 18+ months after filing. Has anyone confirmed if there's a typical timeframe for when these notices go out? I'm wondering if your daughter might still be in that window where they haven't processed the mismatch yet.