Rental income reported by tenant in 1099-MISC is not correct

I have rented my townhome to a start-up company. The start-up company provides housing for its employees.

The start-up company provided me a 1099-MISC form to report rental income. In the form, the rental income is reported in Box 7 - Nonemployee Compensation as opposed to Box 1 Rents. I have been postponing the filing of the tax to the last minute and found this discrepany. I will be reaching out to the company to get a new form 1099-MISC.

Can this be corrected…? What are the issues I can encounter…? Thanks for the responses.

Thanks
…mottai

yes, it can be corrected.

They may have done it by mistake without bad intention. For them, it is a deductible expense, regardless if rent or compensation.

For you it probably makes a huge difference. Box 7 is subject to self-employment tax. Box 1 is not.

2 Likes

It is correctable, some one in that company CPA or finance person made a mistake. File a tax extension and ask them to correct it. Send them in writing or email so that it is not recurring any more.

@ptiemann @Jil Thanks for your prompt response

The company has agreed to correct it and they sent rough drafts of the new form. I am going to file the taxes right now based on the rough drafts… I do not want file extension and then wait for the refund later on…

I am communicating with a millennial in this start-up and their preferred way of communication is through “texting”

Thanks again for the prompt response
…mottai

What is the saying, “when in Rome…”