How to report income with missing 1099-NEC for independent contractor work?

My husband did some independent contractor work last year for a company that should've given him a 1099-NEC, but they never did. He's tried reaching out to them multiple times but they're ghosting him completely. I know exactly how much they paid him (around $65,000 plus roughly $250 in expense reimbursements) from our bank statements. I know we absolutely can't skip reporting this income even if the company never reported it to the IRS. But I'm confused about how to handle this on our tax return. Should we try tracking down their EIN and create our own version of the 1099? Or just report everything on Schedule C? My big worry is that if we put it on Schedule C and then months later the company finally sends a 1099-NEC to the IRS, they'll think we didn't report that income since the actual 1099 won't be referenced on our return. Has anyone dealt with this before? We're trying to file our taxes correctly but this situation is frustrating!

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18 comments

StarStrider

•8M

You're doing the right thing by reporting the income regardless of whether you received a 1099-NEC. The good news is that this situation is actually simpler than you might think! You should report the income on Schedule C as self-employment income. The IRS matches documents by the amounts reported, not by whether you reference a specific form. As long as the amount you report on your Schedule C matches what would be on a 1099-NEC (if they ever issue one), you won't have any problems. Make sure you keep good records of all payments received, in case there are any questions later. The $65,000 should be reported as gross receipts/income on Schedule C, and the $250 reimbursements can either be excluded from income (if they were true reimbursements for business expenses) or included in income and then deducted as business expenses on the appropriate line. Don't worry about creating your own 1099 - that's not necessary. The Schedule C is specifically designed for reporting this type of income, whether you receive a formal 1099 or not.

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StarStrider

•8M

You don't need to list the company's information anywhere on Schedule C - that form only asks for your business information and the income/expense totals. There's no field that asks for the payer's details. If the company eventually issues a 1099-NEC with a slightly different amount, the IRS might send you a notice about the discrepancy. If that happens, you can respond with your documentation showing the actual amount you received. Small differences (like less than $100) often don't trigger notices at all. The key is to have good documentation of all the payments you received.

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Zara Rashid

•8M

I had almost the exact same situation last year. I ended up using taxr.ai (https://taxr.ai) to analyze all my bank statements and they helped me document everything perfectly for my Schedule C. I uploaded my statements and their AI extracted all the payments from that specific company and categorized them correctly. The best part was that they provided a detailed report showing all the payments which I kept with my tax records. When my client finally sent a 1099-NEC six months later (and they got the amount wrong!), I already had perfect documentation ready. Saved me so much stress when I got that IRS letter asking about the discrepancy.

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Zara Rashid

•8M

Yes, it works great with PayPal and Venmo statements too! You just upload those PDFs and it extracts all the payment info. I actually had a mix of direct deposits and PayPal payments from my client, and it handled both perfectly. For your question about accuracy, I was skeptical too at first. But it was surprisingly accurate - it identified 98% of my transactions correctly right away. For the few it wasn't sure about, it flagged them for my review. The best part is you can verify everything it extracts before finalizing the report, so you're always in control. I compared its totals with my manual calculations and they matched exactly.

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Mateo Hernandez

•8M

If the company continues to ignore your attempts to contact them, you might need to get the IRS involved. I was in a similar situation and wasted weeks trying to get my 1099. Finally used Claimyr (https://claimyr.com) to get through to the IRS directly instead of waiting on hold forever. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that companies can be penalized for not issuing 1099s when required, and they sent a notice to my client. Miraculously, I received my correct 1099-NEC within a week after that conversation! The agent also confirmed exactly what others said here - just report on Schedule C accurately and keep good records.

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Mateo Hernandez

•8M

It basically works by waiting on hold with the IRS for you. You enter your phone number, and when their system gets an IRS agent on the line, it calls you and connects you directly to the agent. So instead of you personally waiting on hold for hours, their system does it for you. I was extremely skeptical too! I had tried calling the IRS three times before and got disconnected after 90+ minutes each time. With Claimyr, I went about my day and got a call about 3 hours later with an actual IRS agent ready to talk. Totally worth it because the agent was super helpful with my missing 1099 situation and explained exactly what I needed to do.

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Nia Jackson

•8M

OK I'm back again and absolutely FLOORED. I decided to try Claimyr after posting my skeptical comment because I was desperate to talk to someone at the IRS about my missing 1099 situation. Submitted my info, went grocery shopping, and got a call connecting me to an actual IRS agent while I was in the checkout line! The agent confirmed everything that was said here - report on Schedule C, keep good records, and they can actually contact the company that should have issued the 1099. They've started the process of reaching out to my client. Honestly wish I'd known about this service months ago.

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Aisha Khan

•8M

For the laptop, it depends on when he purchased it and how much it cost. If it was under $2,500, you can potentially use Section 179 to deduct the full cost in one year, assuming it was used more than 50% for business. For the software subscriptions, those are generally fully deductible as business expenses in the year paid. Just make sure you keep receipts for everything. You might also want to look into home office deduction if he was working from home - you can either use the simplified method ($5 per square foot up to 300 square feet) or the regular method which calculates the actual expenses.

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