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Mortgage Grant on form 1099-MISC
Hello all. I received a mortgage grant from my credit union when I bought my home. I received a form 1099-MISC with this amount. I've entered it as "other common income" form 1099-MISC on TurboTax, but it's dramatically increasing my federal tax due amount. I suspect the system thinks it's self-employment income and is assuming I need to pay social security and medicare taxes on it. Is this correct? Is there another way I should be entering it?
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What box was the income reported in on the 1099-MISC? This sounds like it may have been reported in box 3?
Is this a one-time payment (perhaps a rebate?) from your lender? It does not sound like self-employment income.
You can view the tax return by following these steps.
- Down the left hand side of the screen, click Tax Tools.
- Click Tools.
- Click View Tax Summary in the center of the screen.
- Click Preview my 1040.
Self-employment tax will be listed on line 15 of the 1040.
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This was a one time grant given to me by the credit union as part of their program for first time homebuyers.
It was indeed reported in box 3.
I think I figured out how to enter it so it's not charging me for SS or Medicare. Thanks so much, fellow James!
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So you just enter it in box 3? How do I know that I am not paying SS/Medicaid etc on it? The amount I am getting reduced is large. The grant I got was for $8,400 and it reduced what I was getting back by $1,937. 23% seems like I am paying all taxes on this as that is my tax bracket....
I tried the tax tools/tools/view tax summary like the other gentleman said my line 15 has the amount I am getting back.
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So you just enter it in box 3? That is where I entered it. How do I know that I am not paying SS/Medicaid etc on it? The amount I am getting reduced is large. The grant I got was for $8,400 and it reduced what I was getting back by $1,937. 23% seems like I am paying all taxes on this as that is my tax bracket....
I tried the tax tools/tools/view tax summary like the other gentleman said my line 15 has the amount I am getting back.
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Look at your Schedule 2 line 4.
That is where Self-Employment tax (FICA, Social Security ) would be listed if you entered the 1099-MISC as Self-employment income.
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No it isnt there either. Line 4 is my itemize/standard deduction. I am looking at the Tax Summary page. I have no idea where the Schedule 2 line 4 is. How do I get there? Better yet, how/where do I enter the the grant for my down payment so I can ensure only federal taxes are taken out?
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To enter your mortgage grant follow these steps.
- With TurboTax open select Wages & Income.
- Scroll down to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C
- On the next page, select Other reportable income
- On the page, Other Taxable Income enter Mortgage Grant in the description.
This will put the income on Schedule 1 Line 8 of your Form 1040, as required by the IRS. You will pay state and federal income tax on the amount, but it will not be subject to self-employment tax.
If you have entered the 1099-MISC for the mortgage grant you will have to remove it from your tax return.
To delete Form 1099-MISC follow these steps:
- With TurboTax open select Tax Tools in the left panel.
- Select tools
- Select delete forms
- Select delete on the line for Form 1099-MISC
- Select Delete Selected Form
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