1099-NEC received for business income

[NoslenLRac]

My sole proprietorship received a 1099-NEC from a school customer.  The payments I received from this school were for both goods and services.  I have already entered my business information into TurboTax before receiving this form.  Do I need to remove those funds from my business income?  I've reached out to the school to ensure that I was sent the proper documentation, as none of my other school customers have filed that paperwork.  I do not want to accidentally get doubled tax for information I've entered or fail to pay the proper amount of taxes.

[JamesG1]

From your bookkeeping records, you prepare the following Federal 1040 Schedule C to report your sole proprietor income:

Income               $100,000

Expense             $ 60,000

Taxable margin   $40,000

Now you receive a $5,000 1099-NEC that is already included in the $100,000 income already reported above.

You have already correctly reported your income, expense and margin but you may want to report Income as two lines, one for $95,000 and one for $5,000 as an attempt to acknowledge that you received the 1099-NEC.

[NoslenLRac]

Yes, that is exactly how I entered my business info.  

TurboTax doesn't allow one to enter the 1099-NEC in the business section, only under personal.  Splitting up my business income into 2 sections did not change anything.  My concern that I am reporting the same income in both the business and personal sections.  

The business manager for the school who sent me the  1099 suggested I subtract that amount from my business income.  

I will probably need to seek out the advice of a CPA for this issue.

[DianeW777 · Accepted solution]

No, you do not need to change your return if you already included the income and expenses in the business section of your return.  You also do not have to enter the Form 1099-NEC in this case.  Keep it with your tax records, your tax return is already correct.

You can file your return.  If you have another question please add it here and our tax experts will help you.