What action is needed if a member has multiple 1099 employers and also files expenses?

The recommended action when a member has multiple 1099 employers and also files expenses is to structure the file as cash for services. This approach recognizes that the income reported on each 1099 acknowledges that the payments were made for services rendered. Rather than treating the income as separate entities or simply adding up the amounts without proper categorization, structuring the file in this manner allows for clarity and proper accounting of the income as it relates to the expenses incurred.

By recognizing all the income as cash for services, the member can efficiently account for any related expenses and ensure that they are deducting the appropriate amounts. This understanding is crucial in accurately representing financial data when completing tax filings. It also helps in accurately tracking earnings across different employers, which is important for overall income reporting and tax liabilities.

This method supports accurate accounting practices, ensuring that income and expenses are properly aligned, which can lead to more favorable tax treatment and avoidance of complications that might arise from misreporting. With this structuring, it also becomes easier to demonstrate the professional nature of the income to tax authorities.