At the very least, don't claim the retainage money that they are holding as part of your income. If the 1099 they sent you includes your retainage as money paid to you, be sure to have your accountant specify that you haven't received that money. You will then be able to deduct it. Most importantly though, is that they will likely deduct the entire amount they claimed to have paid you on your 1099 on their own taxes. However, the IRS will know the discrepancy and that should trigger an audit with that company. If they are doing shady crap like holding retainages indefinately, they won't be able to withstand an audit and will probably end up being found for all kinds of tax errors.
So, if you end up taking the default on the chin, make sure to at least claim the loss on your taxes.
Re: Retainage
Member #: 40846
Registered: 9/19/2005
Posted:
1493
Name:
Duane Vick
Name:
Duane Vick
Company:
Self-Employed
Occupation:
Installer
Location:
Phoenix AZ
There is 1 reply to this message
