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Thread: Camming taxes (Streamate)-mistake filing as MISC?

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    Default Camming taxes (Streamate)-mistake filing as MISC?

    I have a tax question that I think belongs more under "dollar den..."


    this is regarding a cam company sending out 1099's for PRIOR years..

    My sister cammed and filied her taxes with liberty tax associates under "MISC"...in 2011 for the 2010 year. She paid a lower rate than the 1099 independent contrators would (i believe it was 15% instead of 30%) She had a regular job that year too..the camming was just under MISC income section. That is what H and R Block or Liberty Tax told her to do....Streamate that year (2010) did NOT send 1099's.


    then, she cammed in 2011..and a few months ago filed her taxes for 2011 using Streamate's 1099 forms...
    and then, in may 2012, she got a 2010 tax form, 1099 from Streamate!!!!

    She DID pay taxes for 2010 for her camming job, but not under self employment 1099 income, it was put under MISC by Liberty Tax or whoever which is taxed less.

    IS the IRS going to investigate? I believe she earned 4-5k both years camming....

    *****Also, she put down Streamate as SM ltd, doing "affliate marketing" rather than "Streamate" under her tax form to the IRS. Considering that Streamate sent a 1099 under the name Streamate, will her **employment history from the IRS** have SM ltd or Streamate? She is in grad school for speech therapy so she though that putting doen SM ltd would help her out..willl it?????????

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    Banned Melonie's Avatar
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    Default Re: Camming taxes (Streamate)-mistake filing as MISC?

    ^^^ while there are a lot of missing details, I'll take a guess at the following ... based on a starting assumption that your sister reported her 2010 StreaMates income as miscellaneous tips / other income on her 2010 1040 tax return ( without filing a Schedule C 'profit or loss from a business' )

    Odds are that the 'employer's' share of Social Security / Medicare tax was not paid. This will amount to an additional tax bill for 7.65% of her camming income only.

    If the amount of income your sister reported as miscellaneous income on her 2010 IRS 1040 form actually equals or exceeds the amount shown on the belated 1099 form sent by StreaMates to the IRS, there shouldn't be any major issues. However, if the amount of miscellaneous income that your sister reported is less than the amount shown on the StreaMates 1099, the IRS will definitely investigate the discrepancy. This can result in the IRS imposing accumulated interest charges on the tax money that should have been paid in 2010.

    Also, with the IRS receiving a 1099 for 2010 income, this officially establishes that your sister's 'business' went into operation in 2010. As such, the 'first year exemption' from paying quarterly estimated taxes was 'used up' in 2010 ... meaning that your sister was legally required to file and pay quarterly estimated taxes in 2011. If your sister did not file and pay estimated taxes to the IRS for the four quarters of 2011, or in April and June of 2012, the IRS may also impose 'under-withholding' penalty charges plus interest charges.

    If your sister decides to do 'nothing', odds are that the IRS will be contacting her within the next few months as a result of receiving the belated 1099-misc form from StreaMates which will be 'unexplained' on her 2010 tax return. Your sister certainly has the option of filing an amended tax return for 2010 before the IRS contacts her.

    I would also add that, as a result of last week's US Supreme Court decision upholding Obamacare's IRS collected tax mandate, the IRS is now in the process of hiring an additional 16,000 auditors ( which will nearly double the amount of total IRS auditors ) as authorized by the Obamacare law. Those additional auditors will not be exclusively deployed to deal only with Obamacare related taxes, and will undoubtedly be used to investigate all kinds of tax 'discrepancies' !!!
    Last edited by Melonie; 07-13-2012 at 10:52 AM.

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