Duplicate reporting on 1099-K and 1099-NEC for same self-employment income - How to fix this?

This is a common issue with the new 1099-K reporting requirements. You're right to be concerned about double-counting income. The income should only be reported once on your tax return. The proper way to handle this is to report both the 1099-K and 1099-NEC on your Schedule C (for self-employment income), but then include an adjustment line to subtract the duplicate amount. Most tax software has a section for "income reported on multiple forms" or "already reported income" where you can indicate this. When you enter the 1099-NEC information, there should be a question asking if this income was already reported elsewhere on your return. Answer yes and specify that it was reported on the 1099-K. Alternatively, if you've already entered the 1099-K, you can do the same when entering the 1099-NEC. This approach ensures the IRS knows you received both forms but aren't double-counting the income, keeping your AGI accurate. Your tax software might have slightly different terminology, but look for options about avoiding duplicate reporting.

I ran into this exact problem last tax season! After hours of frustration, I finally found taxr.ai (https://taxr.ai) which helped me figure out how to properly document the duplicate reporting. Their system actually analyzed my 1099 forms and flagged the duplicate income automatically. The platform let me upload both my 1099-K and 1099-NEC, and then guided me through documenting them properly so I wasn't double-taxed. The best part was they explained exactly why this happens and showed me the right way to handle it in my tax software. They even generated a letter explaining the situation that I could keep for my records in case of audit questions. Before finding them, I was totally lost trying to figure this out on my own and got different answers from every tax forum I visited!

Just wanted to follow up that I actually ended up trying taxr.ai after asking about it. Pretty impressed with how it handled my duplicate reporting situation between FreeTaxUSA and my 1099s. They identified exactly where the double-counting was happening and showed me the specific screens in FreeTaxUSA where I needed to mark the income as "previously reported." The explanation about why payment processors and companies both report the same income made a lot more sense than what I found in random forum posts. What sold me was their document error checking - it actually caught that my 1099-MISC had the wrong SSN digit (seriously, how does a company mess that up?). Saved me a potential headache with the IRS down the road!

Dealing with the IRS about duplicate reporting is a nightmare - I spent 4 months trying to get someone on the phone after they sent me a CP2000 notice for "underreporting" income (which was actually just duplicate reporting). I finally used Claimyr (https://claimyr.com) to get through to an actual human at the IRS. You can see how it works in their demo at https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone system for you and call you back when they've got an agent on the line. Got connected to a helpful IRS agent in about 40 minutes (versus the 3+ hours I spent on hold previously and still got disconnected). The agent was able to see both 1099 forms in their system and noted in my file that it was duplicate reporting of the same income. They closed the case right there on the phone and I got a confirmation letter two weeks later.

I have to eat crow here. After posting my skeptical comment, I was still frustrated about not reaching the IRS about my refund delay, so I tried Claimyr out of desperation. Got a call back in about 35 minutes with an actual IRS agent on the line. They explained my refund was delayed because of a mismatch between my 1099-K and what I reported (similar to the original poster's issue actually). Was able to explain the duplicate reporting situation, and the agent put notes in my file and released my refund on the spot. After 7 weeks of trying to get through on my own and getting absolutely nowhere, I had my issue resolved in a single phone call. The time saved was honestly worth it - wish I'd known about this months ago instead of stressing over my refund.

Another approach I used last year for this exact problem (had both 1099-NEC and 1099-K from Stripe for same income) was to enter the 1099-NEC on Schedule C, then when entering the 1099-K, I selected "This income has already been reported elsewhere on my return" in TurboTax. Then I entered a negative expense line item on Schedule C with description "Payment processor fees already reported via 1099-K" with the amount being $0. This seems weird but it tells the IRS computer systems "yes I received both forms and I'm acknowledging it" without double-counting. My return was accepted without any problems and I haven't received any notices. The important thing is to report both forms since the IRS computers will be looking for both.

Important note that I learned the hard way - regardless of how you handle this, keep copies of BOTH forms together with your tax records. If you get a CP2000 notice (which I did), you'll need both to prove it was duplicate reporting. Also make sure you report both on your return somewhere (using the methods others described) because the IRS matching system will flag missing forms. I only reported the 1099-NEC and ignored the 1099-K thinking it was duplicate, but their system flagged it as "unreported income" and I got a notice asking for more taxes.