Received 1099-NEC for our LLC partnership - do we file it on personal returns, 1065, or neither?
We just got a 1099-NEC from one of our clients, but it's made out to our LLC partnership name rather than to me or my business partner personally. I'm a bit confused about how to handle this. I already sent our complete profit & loss statement to our accountant which includes all the income shown on this 1099-NEC. Now I'm second-guessing myself - was that the right approach? What exactly am I supposed to do with this 1099-NEC? Since it has our business name on it rather than either of our personal names, I'm not sure if it needs to go with our personal tax returns, be filed with our partnership 1065, or if we even need to do anything special with it at all. Really appreciate any guidance here... been searching online for a clear answer but coming up empty-handed.
18 comments
Join the conversation
Nathan Kim
This is actually a common question for LLC partnerships. When a 1099-NEC is issued to your partnership (LLC), rather than to you personally, you're handling it correctly by including it in your business income reported on your partnership return (Form 1065). The 1099-NEC income should be reported on the partnership's Schedule K of Form 1065. Your partnership will then issue Schedule K-1s to each partner showing their share of the partnership income. Each partner reports their share of partnership income on their personal tax returns (Form 1040) using Schedule E. You don't attach the actual 1099-NEC to your personal return or the partnership return. The 1099-NEC is essentially just documentation of income that should already be included in your partnership's total revenue. It sounds like you've done this correctly by including it in the profit and loss statement you gave your accountant.
0 coins
Eleanor Foster
•Thanks for the explanation. So if I understand correctly, we don't need to do anything special with the physical 1099-NEC form? We just make sure the income is reported on the 1065, and then it flows to our personal returns through the K-1s? Just want to make sure I'm not missing any specific reporting requirements for the 1099 itself.
0 coins
Nathan Kim
•That's right! You don't need to do anything special with the physical 1099-NEC form itself. Just keep it for your records as documentation. The income should be reported on your Form 1065 as part of your partnership's total income, and then it will flow through to each partner's personal tax return via the Schedule K-1s that the partnership issues. The IRS will match the 1099-NEC income to what's reported on your partnership return, not your individual returns.
0 coins
Lucas Turner
I had this exact same issue with my design consulting LLC last year. After hours of googling and getting nowhere, I ended up using taxr.ai (https://taxr.ai) to analyze my business docs. It was seriously helpful - I uploaded my 1099-NEC and other business docs, and it explained exactly how to handle partnership 1099s in a way that made sense. The tool confirmed what I was suspecting - that the 1099-NEC income gets reported on the 1065 (not directly on personal returns), and then flows through to partners via K-1s. It even pointed out some specific places on the 1065 where this income needs to be properly categorized. Definitely made me feel more confident that I wasn't missing anything important.
0 coins
Kai Rivera
•How accurate is this tool? I've got a similar situation with my massage therapy business (LLC with my sister). We got several 1099s this year made out to the business name, and I'm worried about double-reporting income.
0 coins
Anna Stewart
•Does it handle multi-member LLCs specifically? My accountant seems confused about some of our 1099-MISC forms (we have a real estate LLC), and I'm looking for something that can give me clear documentation to show him about the proper handling.
0 coins
Lucas Turner
•The accuracy has been spot-on in my experience. It specifically addresses the double-reporting concern you mentioned - that's actually one of the most common mistakes with partnership 1099s. It explains that the income flows through the 1065 to your K-1s, so you definitely don't want to report it again on your personal return as direct income. Yes, it handles multi-member LLCs and clearly distinguishes between different entity types. For your real estate LLC situation, it would analyze your specific docs and generate a detailed explanation you could share with your accountant. It even cites the relevant IRS rules and publications, which helped me clarify some points with my own accountant when we had different understandings.
0 coins
Kai Rivera
Just wanted to follow up here - I ended up trying taxr.ai after posting my question. Really impressed with how it handled my LLC partnership situation! I uploaded our 1099s and operating agreement, and it gave me super clear guidance on how to handle everything correctly. The best part was it explained exactly why the 1099-NEC income belongs on the 1065 and not our personal returns. It also caught that one of our 1099s had our EIN wrong (transposed digits) which could have caused matching problems. Definitely worth checking out if you're in a partnership with confusing documentation issues!
0 coins
Layla Sanders
If you're still stuck on this or have any follow-up questions for the IRS, I'd recommend using Claimyr (https://claimyr.com). I was in a similar situation last tax season with my consulting LLC where we got a bunch of 1099s and I needed clarification straight from the IRS on some partnership reporting requirements. I tried calling the IRS directly for weeks but kept hitting the "due to high call volume" message. Claimyr got me through to an actual IRS agent in about 15 minutes who confirmed exactly how to handle 1099s issued to an LLC partnership. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent explained that the 1099-NEC should be reported on the partnership return Form 1065, and that I should keep the physical 1099 in my records but didn't need to attach it to either return. Saved me tons of stress wondering if I was doing it right.
0 coins
Morgan Washington
•Does this actually work? I'm skeptical about any service claiming to get through to the IRS quickly. I've tried calling them about partner distributions and 1099 questions at least a dozen times and never got through.
0 coins
Kaylee Cook
•How does this even work? Doesn't everyone have to wait on hold with the IRS? I've spent literally hours trying to get clarification on how to handle business expenses for our partnership.
0 coins
Layla Sanders
•I was skeptical too until I tried it. It really does work - they use some kind of system that navigates the IRS phone tree and waits on hold for you, then calls you when they have an agent on the line. It works by essentially waiting in the queue for you. Instead of you personally sitting on hold for hours, their system does it, and then it connects you once an actual human at the IRS picks up. For partnership questions like yours, it's incredibly helpful because you can get definitive answers straight from the source rather than relying on potentially outdated online advice.
0 coins
Morgan Washington
Following up on my skeptical comment - I decided to try Claimyr after nothing else was working. Not gonna lie, I was shocked when I got a call back with an actual IRS agent on the line within 35 minutes! I asked specifically about how 1099-NECs issued to an LLC partnership should be handled, and the agent walked me through the whole process. She confirmed it gets reported on Form 1065 (not individual returns) and explained the importance of keeping our EIN consistent across all documentation. Definitely saved me from making a potentially costly mistake on our returns. Worth it just for the peace of mind knowing I got the info directly from the IRS instead of random internet opinions.
0 coins
Oliver Alexander
One important thing to remember - make sure your LLC has filed Form 8832 if you want it to be treated as a partnership for tax purposes. Otherwise, if you have a multi-member LLC that hasn't elected a different tax classification, the IRS automatically treats it as a partnership. Just mentioning this because it affects how your 1099-NEC is handled.
0 coins
Lara Woods
•Huh? I thought multi-member LLCs were automatically treated as partnerships? We never filed any special forms when we set up our LLC 2 years ago. Does this mean we've been doing everything wrong?
0 coins
Oliver Alexander
•You're actually correct - I should have been clearer. Multi-member LLCs are indeed automatically treated as partnerships by default (unless they elect to be treated as a corporation by filing Form 8832). You haven't been doing anything wrong if you've been treating your multi-member LLC as a partnership without filing Form 8832. I was thinking of single-member LLCs (which are disregarded entities by default) or LLCs wanting to be treated as corporations, which do require that form. Sorry for any confusion!
0 coins
Adrian Hughes
Ok dumb question maybe but where exactly on the 1065 does the 1099-NEC income go? Is it line 1 (gross receipts) or somewhere else? Our business got about $45,000 in 1099-NEC income last year and I want to make sure it goes in the right spot.
0 coins
Molly Chambers
•Not a dumb question! It typically goes on line 1a "Gross receipts or sales" on Form 1065. Though if it's for certain types of services, it could potentially go elsewhere. What kind of business is your partnership in?
0 coins