Because the IRS will receive your 1099-Misc as 1099, it is best not to list them under "miscellaneous income."
TurboTax is prompting you to do a Schedule C to allow you to deduct expenses because income from a 1099-Misc can be subject to self-employment tax even if you are doing side jobs.
There are some major differences between "other income" and business income.
Self-employment income
- Money you earn as a contractor, consultant, freelancer, or other independent worker.
- It's reported on 1099-MISC (Box 7), 1099-K (Box 1a), or as cash, check or credit card sales transactions.
- Requires you to complete Schedule C.
- You can deduct expense related to the income.
- Requires you to pay self-employment tax.
Other income
- It's money you received from something like a prize, award, lawsuit settlement, etc.
- It's most often on a 1099-MISC (Box 3).
- You report it on Line 21 of Form 1040.
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There are several types of 1099-MISC forms, with different requirements on your tax return (See details below).
- After you enter the info from your form, we’ll ask you questions to determine the type of 1099-MISC, whether that’s Self-Employment or another type like Rental Properties and Royalties, Farm Income and Farm Rental, etc.We’ll determine what type of income you received and link your 1099-MISC to the correct income section of your return.
Instructions
- Open your return.
(To do this, sign in to TurboTax and click the Take me to my return button.)
- Search for “1099-misc” at the top. In the search results, click the “Jump to” link.
- Now follow the screens to enter your 1099-MISC info and answer some questions.
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If you have already entered at least one 1099-MISC - Click Add Another 1099-MISC to enter a new one.
Whether your 1099-MISC is for Self-Employment, Rent, Royalties, a Lawsuit Settlement, Fishing, or any other reason, enter it on the 1099-MISC screen as instructed above. We’ll link your form to the correct income section of your return after you answer a few questions.
