Taxpayer is a self-employed writer. Her client issued a 1099-MISC with the writer's pseudonym and EIN. The pseudonym is not used in any of the tax forms - 1040, Sched SE and C-EZ. The SSN is used in all the forms, however the EIN is also entered in Sched C-EZ along with the SSN. Is this ok?
Taxpayer is a self-employed writer. Her client issued a 1099-MISC with the writer's pseudonym and EIN. The pseudonym is not used in any of the tax forms - 1040, Sched E and C-EZ. The SSN is used in all the forms, however the EIN is also entered in Sched C-EZ along with the SSN. Is this ok?
No. The client should have given the taxpayer a W-9 to complete before any check was issued. The 1099 has a bad name/EIN and will generate what is referred to as a schedule B notice to the client.
The taxpayer should notify the client of the incorrect name and request a corrected 1099.
ETA - to whom was the original check issued and how did the taxpayer cash it?
Double checked the 1099. Recipient on 1099 is the business name followed by the pseudonym and the business address, which is the same as taxpayer's home address. Sched C has taxpayer listed as proprietor; business name and address the same as the 1099. Sched C has both SSN & EIN. Perhaps, ok this way?
Don't know how check was issued and how it was cashed - have to ask.
John Doe DBA as Richard Roe. As long as the EIN and/or SSN matches the IRS can cross match the documents. Orwell was right we have all become a number, and as said by another author "what's in a name". IRS is most interested in the income being reported.
You are welcome. While working for one of the "big 8" I had some entertainer clients and very few of them used their real names in public, or professionally. Think of John Wayne or Marylyn Monroe, etc. They have to file tax returns and while some used corporations many used Schedule Cs with DBAs. This is very old hat with authors and their "nom de plumes" (IIR the expression correctly) and seudonyms (again IIRC), e.g. Samuel Clemmens. If you decide to use a corporation or an LLC look at the personal service corporation issues. Cheers.
in today's world, most talent cannot use "LLCs" or Schedule C to collect their income.... most must use "loan out corporations".... writers though are different (work with many) and schedule C is often the best route.... be sure to see if the income is "royalties" or "non employee compensation"... the two are potentially taxed differently....