A tax professional reviewing 1099-NEC forms at a desk with a calculator and financial documents.

Year-End 1099-NECs Are Often Wrong—And How to Correct Them

Did you receive a Form 1099-NEC that overstates your income? You’re not alone—and it could mean you’re paying more taxes than you owe.

This problem often arises at year-end when a business issues a 1099-NEC based on what it paid rather than what you received. For example, if you were paid in January for the previous December’s work, the payor might include that income on the prior year’s 1099-NEC—even though you didn’t receive the funds until the following year. Legally, that’s incorrect.

Once issued, 1099 errors can be hard to fix. If you’re stuck with an incorrect form, here’s what you should do:

  • Try to get the payor to issue a corrected 1099—we can help you draft the request with the supporting IRS regulation.

  • If that fails, report the full amount on your return to match the 1099, then offset the overstatement in “Other Expenses” with a brief explanation.

  • Keep documentation—like the postmarked envelope of the actual payment, or email correspondence—proving the payment was received after year-end.

This approach can help you avoid an IRS audit, while still accurately reporting your income.

Don’t let a payor’s mistake increase your tax bill. If you’ve received a questionable 1099-NEC, we’ll help you determine the correct income, prepare the supporting documentation, and ensure your return is properly filed.

If you want to discuss incorrect 1099-NECs, please get in touch with us at hello@agfintax.com.

Related resource: Learn more about optimizing your finances with our Tax Planning services and professional tax filing New Jersey support.

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