This is video is a part of my Field Nation series where I explain how the 1099 Field Nation sent me did not match the deposits I received from them. I explain how I accounted for this extra income that I never actually received so I wouldn’t be taxed on it.
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Video Transcript:
I received my Field Nation 1099 for last year,
And it didn’t match the income that I had in my accounting software.
If you have received your 1099 and haven’t yet done your taxes,
I’m going to explain to you kind of what I did to resolve the difference between what Field Nation reported as my income and what I showed as my income.
On my field. Nation 1099. It showed that I made $46,793.47.
The only problem is I showed that I received deposits of only 42,000.
So there’s a distinct difference there. And if you’re doing your taxes, you want to be accurate.
Let me say, first of all, that I’m not an accountant and I’m not an attorney. So this is not accounting, legal,
or tax advice.
This is just for educational/entertainment purposes. You can
do with this what you will.
I did an export from QuickBooks where I do my accounting software, and I pulled out all of the deposits that I received from Field Nation for last year.
So in total, I received $42,107.51 in deposits
Field Nations 1099 reported to the IRS that I made $46,793.47.
The problem is, I need to account for that $4,600 difference
If you’re paying additional Field Nation fees beyond their normal 10%,
you can’t just do a straight 10% calculation.
Granted, I could have just put in this $4,600
as
a transaction in my QuickBooks account at the end of the year,
but I didn’t want to do that because I don’t want to show that entire expense at one time at the end of the year. I want that to be spread out accurately across the year.
One nice thing that I do like about the Field Nation 1099 is it shows a breakdown of every single month of what they reported your income to be.
What I did to resolve this in my books was to do the export on the payment screen from Field Nation
and export it to Excel. So I would have the exact amount that I was paid every month for Field Nation.
So number one, I made sure that what I showed,
in terms of deposits, matched what they showed on their website. So that’s the first step in reconciling it.
Then I needed to account for the fee.
So, for example, January,
I did a sum of all the January deposits comes out to $974.92.
Then if I go to the 1099,
they reported that I had an income of $1,090.45.
If I were to just add
the difference here into my income, then I would have income that I never really received.
So I needed to actually create an offsetting expense to make up for the fact that there was a 10% fee taken out, or whatever the fee would be for you.
Now, since I never actually received that money,
I can’t really add this to my bank account.
So in QuickBooks, I just use the “Undeposited Funds” account, which is just a temporary holding account.
So at the end of every month, I put in a transaction to show the difference between what the 1099 said that I made and what my actual deposits were.
And then I created a offsetting expense,
calling it Field Nation fee, so that
when I did my taxes,
I wouldn’t have
this $4,000 worth of income that I didn’t actually have and get taxed on it.
To the best of my knowledge, none of my other Field Nation alternative clients or platforms do their 1099’s this way.
It’s a little annoying that Field Nation does it this way.
The bottom line is, as long as you understand the situation and you have a way to account for it, that’s really all that matters.
What you report to your accountant needs to match what the 1099 says.
You just need to make sure that your books, for the other portion of it, for those fees, are accounted for so you’re not paying taxes on income that you never actually received.
If you got value today from what I shared, please like the video and subscribe to the channel. Check out all my other videos on Field Nation and other platforms and other Field Nation alternative clients.
And check out my website at fieldtechacademy.com.
I have a direct client package available that you can purchase
that will bring you a lot of additional clients. So you’re not dependent upon just 1 or 2 clients for all of your income.
As always, let’s get you out in the field making money. I’ll see you in the next video.