Step 1: Confirm that the income is non-taxable and not related to employment/payroll before entering it into TurboTax, you can follow these steps:
- Review the 1099-MISC form: Check the description and the payer's information. If it states "Nonpayroll Payment - Final Pay Non Taxable," it is likely non-taxable.
- Consult your employer or payer: Verify with them that the payment is indeed non-taxable and understand the reason behind it.
- Refer to IRS guidelines: Certain types of income are explicitly non-taxable according to IRS rules. Examples include certain employee reimbursements, gifts, and inheritances
Step 2: Once you have confirmed your income isn't related to employment/payroll or non-taxable - Enter 1099-MISC into TurboTax:
- Open or continue your return.
- Navigate to the 1099-MISC section:
- TurboTax Online/Mobile: Go to 1099-MISC.
- TurboTax Desktop: Search for 1099-misc and select the Jump to link.
- Answer Yes to Did you get a 1099-MISC?
- If you already entered a 1099-MISC, on the 1099-MISC Summary screen select Add another 1099-MISC.
- Enter the info from your form into the corresponding boxes.
- For non-payroll payments, such as other income, make sure to enter the amounts in the appropriate boxes (e.g., Box 3 for other income).
- If you need to enter boxes 4–6 or 8–17, select My form has other info in boxes 1–18 to expand the form.
- Indicate that this income is not related to your main job:
- When asked if this income involves work like your main job, select "No".
- Specify that this income is not self-employment income:
- When asked if this income involves an intent to earn money, select "No".
