If you paid the premiums out of your own pocket or with payroll deductions that came out of your after-tax income, the disability isn't taxable.
One way to offset your 1099-Misc income is to enter an equal amount as a negative number.
Here is how to enter a negative number on line 8 of Schedule 1 under other income:
- Select 'Less Common Income'
- Then select 'Miscellaneous Income'
- Then select 'Other reportable income'
- The next screen will ask if you had 'Any Other Taxable Income?' Select Yes.
- The next screens will ask for a description and the amount.
- Enter the amount as a negative number, and the amount will be reported on on line 8 of Schedule 1
You should also enter your 1099 income the same way as a positive number to avoid being charged self employment tax on the income.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
