Etrade Cash bonus

[bhsong206]

I used TurboTax Premier to file my tax return. I received a cash bonus from ETRADE, which was reported on a 1099-MISC. The bonus was a promotional incentive for transferring additional funds to my ETRADE account.

When I entered this information in TurboTax Premier, it automatically generated a "Business Income and Expenses" form, even though the cash bonus was not related to any business activity.

How should I correctly handle this type of income in TurboTax?

[CatinaT1]

You will need to amend your return so you can report this as other income instead of self-employment income. What's the difference between self-employment income and ...

If you want to make changes or add a document to a tax return that has already been filed and accepted by the taxing agency, you should follow these guidelines. 

• You must first wait until the initial return is completely processed.
• You will have to use the same TurboTax account that you used for the original tax return.
• Once you begin your amendment, you'll see your original return.
• The refund calculator will start new at $0 and only reflect the changes in the refund or tax due
• Only make changes to the areas of your return that need to be corrected.
• You have three years from the date you filed your return or two years after you paid the tax due (whichever is later) to file an amendment

Select your product below and follow the instructions. 

Amend TurboTax Online 

Amend TurboTax CD/Download 

[bhsong206]

Thanks for your response. Regarding the statement "You must first wait until the initial return is completely processed"—my e-filed tax return has been accepted, and I’ve already paid the tax I owed. Does this mean the process is complete, or is there anything else pending? How can I confirm that my return has been completely processed?

[baldietax]

when you enter the 1099-MISC you will get questions whether this as 'intent to earn money'.  Say No to this (as it's passive income) and it will go onto Schedule 1 and your 1040 line 8, instead of generating Schedule C etc.

[DawnC]

It has been fully processed once the return shows up in your IRS online account.   You can prepare the amendment now; just wait until your payment has cleared before you file it.   You will need to delete the Schedule C and that 1099-MISC.  

How to delete forms in TurboTax Online

How to delete forms in TurboTax Desktop

Then re-enter the 1099-misc making sure to answer the 3 follow-up questions as follows:

1. Select No, it didn’t involve work like my main job on the Did the involve work that's like your main job? screen.
2. Select I got it only in 2024 on the How often did you get income for? screen.
3. Select No, it didn’t involve intent to earn money on the Did the work involve an intent to earn money? screen.

Answering differently to any of those three questions will imply self-employment and generate Schedule C.  

Once you are done entering the income, verify it is on the correct line on Schedule 1.    Self-employment/Business will go to Line 3 and Other income (where it should be) will go to Line 8.