1099-NEC

[gsmall10]

I have a small construction business and received 2 1099-NEC this year.  When I entered them into where they were suppose to be entered it ask if I have and expenses to deduct.  I answered no because I only kept expenses based on the entire business not the portion of it that applied to the earnings on the 1099 NEC.  When I did the business income that is where all the expenses including the vehicle expenses were deducted.  Was this ok.  The business income looks low and the expenses looks high.

[Opus 17 · Accepted solution]

No, this is a problem with the program design this year.  You need to delete the 1099-NECs from the section they are in, create your small business first, then enter all your small business income and expenses together, including these 1099s. 

[gsmall10]

Thanks, Do I enter the entire income in the one place or do I break it up and enter some in where I use to enter the 1099-MISC

[Opus 17]

Enter all your business income, including 1099-NEC forms, in the business section. 

If you entered the 1099-NEC in the personal section of the program and checked "I have expenses for this income" that will create a schedule C.  But I don't know if it will link to the existing schedule C, or if it will try and create a new schedule C for a separate business.  Turbotax really changed how 1099s were entered this year and there seems to be a high likelihood that people can enter a 1099-NEC and not create a proper schedule C or pay SE tax, which will cause big headaches for those taxpayers down the road. 

I know that if you enter one 1099-NEC and check the box for "I have expenses" it will create a schedule C.  I haven't done any testing to see what happens if you enter another -- does it create a new Schedule C or go on the first one?  But the safest thing to do is only use the business section to enter business income.  And print your return and review it carefully before filing. 

[LYN58]

Great help,.  Thanks!