So here’s the story, I helped someone do their taxes on Turbo Tax. She brought over her W-2’s and 30 mins later we were done. Well, the next day she showed up with a 1099-misc from a place she forgot about. So anyways, no big deal I think, I go back on TT enter the 1099-misc, print out new forms and get ready to mail each of them in with a check (no taxes were taken out to begin with). Well I wasn’t sure about something so before mailing it I took it all to a CPA friend of mine and asked him. He told me that I entered the 1099 incorrectly and that I’d have to change it. Well as it turns out, I can’t (from what I can tell) go back and do that on TT. And since I’m changing this 1099 from “wages” to “self employment income” it get’s into business stuff that I don’t know if I can do by hand. I know TT can handle that since I went in and changed it, but it won’t print out a new 1040X and Form 1X (Wisconsin) correctly. Any ideas on what to do? I’m thinking I’m just going to have to hand her the original tax return papers (the ones that were e-filed) and the 1099 she gave me and tell her that I don’t know how to handle
I did something very similar last year. I e-filed on TT and got a 1099 three days later based on income about which I had forgotten. I ended up having to file a 1040X by April 15 (to avoid penalties) and an IL1040X later on. The e-file should go through as-is, and when it is done, complete the 1040X (TT can do it). In IL, you cannot file an IL1040X until the federal 1040X has been accepted by the IRS (they send a letter). When I got that letter from the IRS (in late August, IIRC), I then had 120 days to complete the state form and send in the additional taxes owed to them.
One other question, why is the 1099-misc from self-employment? If it isn’t self employment, but is actually part of a business transaction, then self-employment taxes may not be necessary.